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25 Sep

Comprehensive Overview of Federal Home Buying Incentives in Canada

General

Posted by: Indra Ramayan

There are several federal home-buying incentives and programs in Canada aimed at assisting homebuyers and promoting affordable homeownership. Please note that the availability and terms of these programs may change over time, so it’s essential to verify the latest information with official sources or consult an advisor. Here are some federal home-buying incentives and programs in Canada:

  1. First-Time Home Buyer Incentive (FTHBI):
    • This program helps first-time homebuyers by providing shared equity loans with the Canadian government. It allows eligible buyers to finance a portion of their home purchase through a shared equity mortgage with the government.
    • The government shares in the home’s appreciation and provides a 5% (or 10% for new construction) or 10% (for existing homes) shared equity loan to reduce the overall mortgage load.
  2. Home Buyers’ Plan (HBP):
    • The HBP allows first-time homebuyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to use toward a down payment, tax-free.
    • The withdrawn amount must be repaid to the RRSP within 15 years, providing flexibility for homebuyers.
  3. GST/HST New Housing Rebate:
    • This rebate program provides a partial refund of the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) paid on the purchase of a new or substantially renovated home.
    • Eligibility varies based on factors such as the purchase price and whether the home is intended to be a primary residence.
  4. Home Accessibility Tax Credit (HATC):
    • The HATC offers a non-refundable tax credit for eligible expenses incurred to make a home more accessible for individuals with disabilities.
    • This credit can help offset the costs of home renovations and improvements related to accessibility.
  5. Canada Mortgage and Housing Corporation (CMHC) Green Home Program:
    • This program encourages energy-efficient home purchases by providing a premium refund to buyers of eligible energy-efficient homes or those who make energy-saving renovations to their existing homes.
  6. Energy Efficiency Programs and Rebates:
    • Various provinces and territories in Canada offer energy efficiency programs and rebates for homebuyers and homeowners who make energy-efficient upgrades to their homes. These programs aim to reduce energy consumption and lower utility costs.
  7. Rural Homebuyers:
    • There are programs and incentives specifically designed to encourage homebuying in rural areas, such as lower down payment requirements and grants for renovations or improvements to rural properties.
  8. Indigenous Homeownership Programs:
    • Indigenous people in Canada may have access to specific homeownership programs and financial assistance tailored to their needs and circumstances.
  9. Mortgage Insurance Programs:
    • The CMHC, along with private mortgage insurers, offers mortgage insurance programs that allow homebuyers to purchase a home with a lower down payment (as low as 5%) while still protecting lenders in case of default.

Remember that the availability and terms of these programs can change, and eligibility criteria may vary depending on factors such as location, income, and the type of home you intend to purchase.

It’s advisable to consult with a financial advisor or contact relevant government agencies for the most up-to-date information on federal home-buying incentives in Canada.

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