New Canadian First-Time Home Buyers' Benefits

Benefits Offered to First-time Home Buyers

First-Time Home Buyer Incentive

Eligible first-time 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.

First-Time Home Buyers’ (FTHB) tax credit

$5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief.

Home Buyers’ Plan

Withdraw up to $35,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or a related person with a disability. (up from the current level of $25,000 where it has been for the last decade.)

GST/HST New Housing Rebate

Recover part of the GST or HST that you paid on the purchase price or cost of building your new house, on the cost of substantially renovating or building a major addition onto your existing house, or on converting a non-residential property into a house.

THE FINANCIAL BREAKDOWN

Couple earning $120,000

$480,000 total purchase

-$24,000 down payment

-$48,000 matched by CMHC

=$408,000 mortgage

WHAT YOU CAN GET FOR under $500,000

Based on a couple earning $120,000 annually, we’ve compiled a look at some properties you can get in major housing markets in Canada under the 500 000 price range.

In Kelowna: currently houses/townhouses listed in Rutland & WEC, under 2300 sqft, 2-5 beds & 2-3 baths.

Single family-66

Strata-367

In Toronto: No houses listed but one-bedroom condos are available, typically 600-1,000 sq feet. Condos have more rooms and additional bathrooms as you get away from the city core. There is almost no supply below $300,000.

In Vancouver: No houses listed but one-bedroom condos are available, typically 600-1,000 sq feet. More rooms and additional bathrooms as you get away from the city core.

In Calgary: You can find listings for two-bedroom bungalow houses downtown, along with two-bedroom condos over 900 square feet.

In Winnipeg: Limited supply at this price range. Detached houses are available, however, with two-plus stories and multiple rooms. Large condos over 1,000 sq feet are available closer to a $300,00 price point.

THE FINE PRINT

To qualify, you must:

be a first-time homebuyer.
have a minimum down payment starting at 5% with interest rates comparable to those with a 20% down payment
have a household income of less than $120,000 per year and the mortgage and incentive amount together can’t be more than four times the household income.

Other notes:

The program caps out at four times the applicant’s annual income, which means it can only help homeowners looking to buy properties where the mortgage value plus the CMHC loan don’t exceed $480,000
CMHC would kick in up to 10 percent of the value of a newly built home, or five percent of the value of a resale.
It’s not free money -buyers pay back what they owe, plus a corresponding share in any gains, down the line.
Only insured mortgages will be eligible, meaning this will be restricted to those with a down payment worth less than 20% of the purchase price.
Buyers will not be exempt from the federal “stress test” regulations (a mandatory mortgage qualification using the five-year benchmark rate published by the Bank of Canada or the customer’s mortgage interest rate plus 2%)