How to Save Thousands As a First Time Home Buyer in 2023
Are you a first-time home buyer feeling overwhelmed by the complexities of the real estate market? Don’t worry, we understand how daunting it can be to navigate the world of pre-sale condos, down payments, and mortgages. At ipresalecondos.com, we’re here to alleviate your concerns and make the process as easy and enjoyable as possible.
One of the ways we help first-time home buyers is by educating them about government grants and rebates they may be eligible for. That’s right – the government wants to help you achieve your dream of homeownership, and several programs could make a big difference in your finances.
In this blog post, we’ll be sharing nine government grants and rebates that you should know about if you’re a first-time home buyer. And don’t worry if you’re not a real estate expert – we’ll explain everything in an easy-to-understand way. So, whether you’re dreaming of a cozy condo or a spacious townhouse, grab a cup of coffee and let’s dive into the world of government incentives for first-time home buyers!
1. Home Buyer's Plan
One of the best government incentives for first-time home buyers is the Home Buyers’ Plan. This program allows home buyers to withdraw up to $35,000 from their RRSP (couples up to $70,000) for a down payment on their first home.
The great thing about this plan is that it offers a tax-free way to borrow money from yourself and use it towards your home purchase. The only requirement is that you must repay the amount within 15 years, making it a flexible and manageable option. Moreover, some individuals are even eligible to use the program a second time, such as in cases of marriage breakdown or if they have already repaid their RRSP.
The Home Buyers’ Plan can also be used in conjunction with the First Home Savings program, which offers a tax-free savings account specifically designed for first-time home buyers.
2. First Home Savings Account
The First Home Savings Account is another fantastic incentive for first-time home buyers looking to save for a down payment. With this program, individuals can contribute up to $80,000 yearly, with a maximum contribution limit of $40,000 towards their down payment.
One of the great benefits of this program is that contributions are tax-deductible, meaning you can get a tax break for saving towards your home purchase. What’s more, the capital gains and interest earned on your savings are tax-free, allowing you to maximize your savings potential.
And just like the Home Buyers’ Plan, the First Home Savings Account can be used in combination with other programs, giving you even more options to help you achieve your dream of homeownership.
3. CMHC First Time Home Buyers Incentive
At ipresalecondos.com, we understand that every first-time home buyer has unique needs and financial situations. That’s why we offer personalized guidance and support to help you take advantage of programs like the CMHC First-Time Home Buyers’ Incentive. This is an excellent program for first-time home buyers looking to reduce their monthly mortgage payments. This program is a shared equity mortgage with the Government of Canada, which means that the government contributes towards the down payment in exchange for a stake in the home’s equity.
Under this program, first-time home buyers with a household income of less than $120,000 can receive either a 5% or 10% downpayment on the purchase of a newly constructed home or 5% for a resale home.
The best part is that you don’t have to make any ongoing payments on the incentive, and you can choose to repay it later or at the time of resale. This program is a fantastic way to reduce your monthly mortgage payments and make homeownership more affordable.
4. BC Property Transfer Tax (PTT) First-Time Home Buyers’ Program
The BC Property Transfer Tax (PTT) First-Time Home Buyers’ Program is an excellent initiative that can help qualifying first-time home buyers save a significant amount of money.
Under this program, eligible buyers may be exempt from paying the property transfer tax, which is calculated at 1% on the first $200,000 and 2% on the remainder of the purchase of a resale home priced up to $500,000. Additionally, the program offers a partial exemption for properties priced between $500,000 and $525,000. Unfortunately, this program is not available to foreign buyers or taxable trustees.
At ipresalecondos.com, we can provide expert guidance and support to help you understand the eligibility criteria and take advantage of any programs or exemptions that may be available to you.
5. BC PTT Newly Built Home Exemption
The BC PTT Newly Built Home Exemption is an excellent program that can provide qualifying buyers with tax exemptions on newly built properties priced up to $750,000, as well as a partial exemption on homes priced between $750,000 & $800,000.
Although this exemption is beneficial, determining whether you qualify can be complicated, and it’s crucial to have expert guidance to help you understand the eligibility criteria and take advantage of any available programs or exemptions.
At ipresalecondos.com, our experienced advisors can provide you with the support and guidance you need to make the best decision for your unique situation. Contact us today to learn more about the BC PTT Newly Built Home Exemption and how we can help you navigate the process
6. First-Time Home Buyers’ Tax Credit
The First-Time Home Buyers’ Tax Credit is a fantastic opportunity for eligible individuals who have purchased a qualifying home to claim a home buyers’ amount of $10,000 on Line 31270 of Schedule 1 when filing their income tax and benefit returns.
This credit can offset some of the expenses associated with buying your first home, including legal fees, inspections, and land transfer taxes.
7. GST/HST New Housing Rebate
The GST/HST New Housing Rebate is a federal program that provides rebates to first-time homebuyers who are purchasing a new home. The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are federal taxes that apply to the purchase of goods and services in Canada.
The rebate allows eligible buyers to apply for a rebate of up to 5% of the purchase price, to a maximum of $6,300. For new homes priced between $350,000 and $450,000, a proportional GST rebate is available. However, for homes priced above $450,000, no rebates are available.
These rebates can significantly reduce the cost of purchasing a new home for first-time buyers, making it easier for them to get into the real estate market.
8. BC Home Owner Grant
The BC Home Owner Grant is a program that reduces property taxes for eligible homeowners in British Columbia. The grant applies to properties with an assessed or partitioned value up to $2.125 million, and the amount of the grant is reduced by $5 for every $1,000 above the threshold.
The grant amounts are as follows:
$570 for the basic grant
$770 if the home is located in a northern or rural area
Up to $845 for homeowners aged 65 or older or homeowners with a disability
Up to $1,045 for homeowners aged 65 or older or with a disability in northern or rural areas.
To be eligible for the grant, you must be a Canadian citizen or permanent resident and occupy the home as your principal residence. The grant threshold applies across the province, and applications must be made each year to receive the benefit.
9. BC Property Tax Deferment Programs
For some homeowners, property taxes can be a considerable expense. Fortunately, the BC government has programs in place to help those who may have difficulty paying their taxes.
The Property Tax Deferment Program offers different options depending on the homeowner’s situation. For seniors aged 55 and older, there is a program specifically tailored to their needs, allowing them to defer their property taxes. The Financial Hardship Property Tax Deferment Program helps low-income homeowners who may not have the financial resources to pay their property taxes. And for families with children under the age of 18, there is a Property Tax Deferment Program available as well.
These programs offer peace of mind to those who may be struggling with their property taxes and can help them stay in their homes.
At ipresalecondos, we believe that everyone should have access to their dream home, and we are dedicated to making that happen for first-time homebuyers. Our team of experts includes mortgage specialists, real estate lawyers, home inspectors, and other professionals who work together to provide our clients with the best deals and top-notch service.
We understand that buying a home can be overwhelming, especially for first-time buyers, so we offer a personalized first-time homebuyer consultation meeting. During this meeting, we listen to your individual goals and needs to find properties that fit your specific requirements.
Our goal is to make the home-buying process as smooth and stress-free as possible for our clients. So, whether you’re looking for a resale home, a newly built home, or want to take advantage of the various tax incentives and rebates available, we are here to help you every step of the way.