In an effort to make home ownership more possible for Canadian residents the Government of Canada offers a number of incentives to help buyers with their down payments. Here are a few of the more popular incentives offered:
- Home Buyer's Plan (HBP): Allows eligible home-buyers to withdraw up to $25,000 tax free from their Registered Retirement Savings Plan (RRSP0 to purchase or build a qualifying home.
- Tax-free Savings Account (TFSA): This account is an excellent way to save money for a down payment since no tax is paid on the interest accrued and the money is more accessible than an RRSP.
- GST/HST New Housing Rebate Program: Eligible buyers of new homes may be able to claim a rebate for a part of the tax paid on the purchase price or cost of building a home. On homes purchased for less than $350,000, the maximum rebate is $8,750. It is reduced proportionately on homes priced in the $350,000 to $450,000 range and is not available on new homes priced at $450,000 or higher (before tax)
- Home Buyers' Tax Credit (HBTC): This program is designed to help first-time buyers with the costs associated with the purchase of a home such as the legal fees and land transfer taxes. Eligible buyers can claim $5000 for this tax credit, providing up to $750 in federal tax relief.