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  • Barbara Singh

Down Payment Tips, Options, and Assistance Programs

Did you know that there are programs offered by the Government of Canada that can help you become a homeowner? These programs are available to assist first-time buyers in purchasing a property. If you plan on buying a home in 2021, these options may help you get into your first property a little bit faster.

1. First-Time Home Buyer Incentive

The First-Time Home Buyer Incentive Program assists, like the name says -first-time homebuyers. Eligible homebuyers who have the minimum down payment for an insured mortgage can apply to finance a portion of their home purchase through a shared equity mortgage with the Government of Canada. The program offers an additional 5% or 10% of the property purchase price to put toward the down payment. This will lower your monthly repayments, therefore making homeownership more affordable.

2. Home Buyers' Tax Credit

In 2009, the Government of Canada introduced a tax credit for first-time homebuyers to assist with the costs associated with the purchase of a home. This is a $5,000 non-refundable income tax credit amount on a qualifying home and the home does not have to be a single family house; it also applies to condos and townhouses. For new eligible homeowners, the credit can provide up to $750 in federal tax relief. The Home Buyers’ Tax Credit is calculated by multiplying the lowest income tax rate for the year (15% in 2020) by $5,000. This means for 2020, it will reduce your owing Federal tax amount by $750. If you believe you are eligible for this tax incentive, I recommend speaking with your accountant for more details.

3. Home Buyers' Plan

As a first-time homebuyer, the Home Buyers’ Plan allows you to withdraw up to $35,000 in a calendar year from your registered retirement savings plans (RRSPs) to use towards the down payment to buy or build a home. Certain conditions must be met in order to be eligible to participate in the Home Buyers’ Plan, including the following:

  • you must be considered a first-time home buyer

  • you must have a written agreement to buy or build a property

  • you must be a resident of Canada when you withdraw funds from your RRSPs

  • You must intend to occupy the home as your principal place of residence within one year after buying or building it.

This is not an exhaustive list of qualifying criteria. Your bank's financial planner or accountant will be able to provide additional details and guide you through the process.

4. GST/HST New Housing Rebate

This rebate allows an individual to recover some of the GST or the federal part of the HST paid for a new or substantially renovated house that is for use as the individual's primary place of residence. In addition to this, other provincial new housing rebates may be available for the provincial part of the HST whether or not the GST/HST new housing rebate for the federal part of the HST is available.

You may be eligible to claim this GST/HST new housing rebate if you are an individual and find yourself in one of the following situations:

  • You purchased a new or substantially renovated house (building and land) from a builder

  • You purchased a new or substantially renovated mobile or floating home from a builder (this includes the manufacturer or vendor)

  • You purchased a share of the capital stock of a cooperative housing corporation (co-op) where the co-op paid tax on a new or substantially renovated house

  • You purchased a new or substantially renovated house from a builder where you leased the land from that builder under the same agreement to buy the house, and the lease is for 20 years or more or gives you the option to buy the land

Owner-built houses may also be eligible to apply for this rebate if you will be using the house as your primary place of residence and one of the following applies:

  • You built a house on land that you already owned or leased

  • You substantially renovated your existing house

  • You renovated your existing house and built a major addition to your house

  • You converted a commercial building that you own into your house

Again, this is not an exhaustive list of qualifying criteria, and I would also recommend discussing this option with your accountant.

These programs are Government initiatives in place to help you become a homeowner and to assist you, the buyer, in purchasing your first home.

If you would like to discuss these options, you can connect with me on 416-616-9740 or email

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