Buying your first home in Canada is a monumental achievement, but the financial hurdles can be daunting. Fortunately, the federal and provincial governments offer several programs to help bridge the gap.
1. The FHSA (First Home Savings Account)
This is the newest and most powerful tool for first-time buyers. It combines the best of an RRSP (tax-deductible contributions) and a TFSA (tax-free growth and withdrawals). You can contribute up to $8,000 per year, with a lifetime limit of $40,000.
2. The Home Buyers' Plan (HBP)
The federal government recently increased the HBP limit from $35,000 to $60,000. This allows you to withdraw from your RRSP tax-free to use as a down payment, provided the funds are repaid over 15 years.
3. Land Transfer Tax Rebates
In provinces like Ontario and British Columbia, first-time buyers are eligible for significant rebates on land transfer taxes. In Ontario, this can be up to $4,000, and in the city of Toronto, an additional rebate may apply.