Incentives For First-Time Buyers
First-time homebuyers have a number of Government programs and incentives available to them that current and previous homeowners don’t. The following Government initiatives are available for first-time buyers only:
The Home Buyers' Plan (HBP)
This is a government program that allows first-time homebuyers to withdraw up to $25,000 tax free from their RRSP ($50,000 per couple) to purchase or build a home. The funds can be used for the down payment or for purchase related items such as furniture, moving expenses or closing costs. This program has a number of qualifying requirements. Here are some of them:
- You must be a resident of Canada and the home must be your principal residence.
- The funds must be in your RRSP for a minimum of 90 days.
- To be eligible you cannot have owned a home in the preceding 5 years.
- You must replenish your RRSP over a 15 year period, or sooner, to avoid paying tax.