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In Canada, there are several first-time home buyers incentives approved by the federal government. These programs are designed to financially help first time buyers on their way to homeownership.
The First Home Savings Account (FHSA) is a registered account allowing individuals to save up to $8,000 annually ($40,000 lifetime maximum) tax-free. Contributions are tax-deductible, and withdrawals to buy a first home are tax-free.
Home Buyers’ Tax Credit (HBTC) is a non-refundable federal tax credit worth up to $1,500. You can claim the credit when you file your personal income tax return for the year in which you purchased your home. You can claim this home buyer's incentive if it is your principal residence, or you haven’t owned a home in the last 4 years.
GST New Housing Rebate. If you’re buying a new build or substantially renovated home, you may be eligible for a GST rebate from the federal government up to $8,750.
Home Buyers' Plan (HBP): Enables first-time buyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) tax-free to purchase a home (up to $120,000 for couples). Keep in mind, funds must be repaid within 15 years.