There are several support programs available for first-time buyers in Canada, including the Home Buyer Program and the first home savings account (FHSA). First-time home buyers may also be eligible for a land transfer tax rebate or other federal or state grant or rebate.
Chances are, if you've used one of these incentives in the past, you won't need a second one. However, there are many reasons you may want to participate in the first home buyer program as well—and you may be eligible.
“It really depends on the program,” says Denise Laframboise, a mortgage broker with LaframboiseMortgage.ca in Brooklin, Ont. “Each program has its own conditions [qualifying as a] first home buyer. It is not one thing in every program and in every province or municipality.”
Can you qualify as a first time home buyer?
Yes. However, each home buying program in Canada uses its own definition of “first-time home buyer,” and you will have to fall within that definition to qualify. Learn more about Canada's first-time home buyer programs and whether you can access more than one of their benefits.
Home buyer program
The Home Buyers' Plan (HBP) is a federal program that allows first-time home buyers to withdraw up to $60,000 from their registered retirement savings plan (RRSP) for the purpose of buying or building a home (before April 16, 2024). , the limit was $35,000 per person). Couples buying property together can access up to $120,000 in their RRSPs. An HBP works like a personal loan, in that borrowers must repay their RRSP gradually over a 15-year period. If they don't, part of the withdrawal is taxed as income each year.
HBP defines a first-time home buyer as someone who has not owned a home, or has not owned a home owned by their current spouse or common-law partner, within the past four years. That last part is what opens HBP's doors to second home buyers. As long as your home purchase falls outside the four-year window, you can use the money from your RRSP to buy a second home without any withdrawal tax implications.
Note that the eligibility window is longer than it seems. It starts on Jan. 1 for the fourth year before withdrawing from your RRSP. So, let's say you intend to withdraw money from your account on Nov. 15, 2024. To do so, you must not own a home since at least Jan. 1. 2020—that's almost five years.
You may wonder about couples who have separated and are no longer living together. Previously, there were no exceptions to the four-year rule mentioned above. But under new rules introduced in 2019, a person can again qualify as a first-time buyer under the following conditions:
- You have been living separately and apart from your spouse or common-law partner for at least 90 days.
- You are not living in a home owned by your new partner or spouse at the time of withdrawal.
It doesn't end there. To use the program a second time, you must have fully paid back your previous HBP balance before Jan. 1 of the year of your next RRSP withdrawal. Depending on how much you have withdrawn, it may be difficult to pay the entire amount on time.
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