Canadian Home Buying Incentives

The Homebuyer’s Plan

In the recent federal budget changes were made so first-time buyers can now withdraw up to $25,000 (formerly $20,000) from an RRSP tax-free for the purpose of buying a home, if qualified.  

There is up to 15 years to repay the amount withdrew from the RRSPs.  The first repayment is due the second year following the year in which the withdrawals were made.  For each year of the repayment period, 1/15 of the total amount has to be repaid until the full amount is restored.

Applications are available through Canadian Revenue Agency at: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

First- Time Home Buyers’ Tax Credit

A $750 tax credit for first-time home buyers to help with closing costs, such as legal fees, disbursements and land transfer taxes.

The tax credit can be claimed on your Federal Income Tax Return.  Prospective first time home buyers should consult a qualified tax advisor or legal professional to make sure they qualify.

Home Renovation Tax Credit

The recent introduction of the Federal Government’s new $2.5 billion Home Renovation Tax Credit (HRTC) program will now provide Canadians with added incentive.  The program allows for a 15 per cent tax credit on eligible renovation expenditures such as work performed or goods purchased between January 27, 2009 and February 1, 2010.  A credit of up to $1,350 per household can be claimed for the 2009 tax year on renovations including upgrades to bathrooms and kitchens, the installation of new flooring or carpeting, and replacing a furnace. 

(BC Only) First Time Home Buyers Program

Introduced in 1994, the First Time Home Buyers' Program is designed to help British Columbians purchase their first home. Under the program, eligible purchasers can claim an exemption from Property Transfer Tax if the fair market value of the home is less than the threshold amount.

For registrations on, or after, February 20 2008, the fair market value threshold for eligible residential property is $425,000. A proportional exemption is provided for eligible residences with a fair market value of up to $25,000 above the threshold (i.e. up to $450,000).