Recent changes to mortgage qualification guidelines have significantly improved the purchasing power of first-time home buyers in Canada. Under the new rules, first-time buyers can now purchase a new construction or existing property with a minimum down payment of 5% on the first $500,000 and 10% on the remaining balance, up to a maximum purchase price of $1.5 million. This marks an increase from the previous cap of $1 million, allowing buyers to enter a broader range of markets.

Perhaps the most impactful change is that first-time buyers can now qualify based on a 30-year amortization period, up from the previous 25-year limit. A longer amortization means lower monthly mortgage payments, which can improve affordability and allow buyers to qualify for a larger loan.

This new guideline also enhances the competitiveness of first-time buyers versus non-first-time buyers. While first-time buyers can apply these rules to all property types, non-first-time buyers can only access the extended amortization if they are purchasing a newly built home, or if they contribute a down payment of at least 20%.

 

Eligibility Criteria:
To be considered a First Time Homebuyer, you must not have owned a home in the past 4 years. If you’re buying with a spouse (or common-law partner) who is not a first-time home buyer, you cannot have lived in a house they owned for 4 years

 

Click Here to be redirected to a previous article about the FirstStep 5/30 Program

A first-time home buyer can simultaneously access funds from both an RRSP and/or First Home Savings Account when purchasing a property. Under the RRSP Home Buyer Plan (HBP), applicants can withdraw up to $60,000 from their RRSPs tax-free to use towards the purchase or construction of a home. If there is an additional applicant on the application who is also a first-time buyer, they too can access their $60,000 allowable limit, thereby, increasing the collective/eligible amount to $120,000 (tax-free). Under the First Home Savings Account (FHSA), the applicant can access unlimited funds as long as it’s used towards the purchase of a property.

Eligibility Criteria:
-First-Time Homebuyer: You must not have owned a home in the past 4 years. If you’re buying with a spouse (or common-law partner) who is not a first-time home buyer, you cannot have lived in a house they owned for 4 years
-Use of Funds: The money withdrawn must be used to buy or build a home for yourself or a close relative (parent, child, sibling, etc.) who is disabled.
-Home Purchase or Build: The home must be in Canada and be intended as your primary residence.
-Repayment Terms: You must repay the withdrawn funds back into your RRSP over 15 years, starting the second year after the withdrawal.
-Timing: The funds must be in your RRSP at least 90 days before you make the withdrawal.

 

Program Overview: 

Provides a rebate on the GST/HST paid on the purchase of a new or substantially renovated home. This rebate can be as high as 36% of the GST/HST paid, up to a maximum of $6,300 in federal rebates. Not exclusive to first-time homebuyers, but regularly used by first-time homebuyers who purchase newly constructed homes. 

Eligibility Criteria:
-New or Substantially Renovated Home: The home must be newly built or substantially renovated (more than 90% of the home must be renovated).
-Primary Residence: The home must be your primary place of residence.
-Property Price: There are certain limits on the home price for eligibility. For instance, the federal rebate applies to homes priced at or below $350,000, with a reduced rebate for homes priced up to $450,000.
-GST/HST Paid: The rebate is for the GST or HST portion of the purchase price, which can be claimed on newly constructed homes.
-Individual: The buyer must be an individual (not a corporation or a non-resident).
-Participants: this program is not limited to first-time buyers, all buyer profiles are eligible

 

A non-refundable federal tax credit of $1,500 for first-time homebuyers. This is a one-time credit that helps reduce the amount of income tax you owe. Click Here to be redirected to the Government of Canada for more details.

Eligibility Criteria:
-First-Time Homebuyer: The buyer must be a first-time homebuyer (again, not having owned a home in the last 4 years).
-Home Purchase: The property must be purchased and used as the buyer’s principal residence. This includes newly constructed or resale homes.
-Non-Refundable: Since this is a non-refundable tax credit, if you owe less than $1,500 in taxes, you will not receive a refund for the balance.
-Timing: The home must have been purchased during the current tax year.

 

 

In addition to the federal first-time homebuyer programs available across Canada, Alberta does not offer any additional provincial incentives (at least, none that are particularly meaningful). The reason for this is simple: Alberta doesn’t impose the hefty property transfer taxes that are common in provinces like BC and Ontario. Instead, they charge a negligible Mortgage and Property Registration fee, which usually adds up to just a few hundred dollars. For example, a first-time buyer in BC would face an $8,000 property transfer tax on a $525,000 home (payable upon the completion/closing date). In contrast, that same purchase value in Alberta would equate to a $455 Mortgage and Property Registration fee. This creates a unique advantage in Alberta, letting you enjoy the best of both worlds—access to a vibrant city with all the amenities, while benefiting from affordable homeownership without the major financial burden seen in other provinces. Alberta is, quite simply, the place where homeownership is not only more affordable but also more attainable.

 

When purchasing your first home in British Columbia, the First-Time Home Buyers’ Program is the key provincial initiative that can help reduce or eliminate property transfer tax. This is by far the most impactful and widely used first time buyer program available. To qualify for the exemption, there are a few important criteria you need to meet as outlined below.

Program Overview:
Reduces or eliminates the property transfer tax for first-time homebuyers in BC.
The exemption applies to the percentage of ownership that qualifies under the program.

Eligibility Criteria for Full Exemption:

Purchaser must:
-Be a Canadian citizen or permanent resident.
-Have lived in BC for at least 1 year immediately before registering the property, or filed at least 2 income tax returns as a BC resident in the last 6 taxation years.
-Never have owned a registered interest in a property used as a principal residence anywhere in the world.
-Never have received a first-time homebuyer exemption or refund.

Property must:
-Be used as the purchaser’s principal residence.
-Have a fair market value of $835,000 or less (effective April 1, 2024).
-Be 0.5 hectares (1.24 acres) or smaller.
-Contain only residential improvements.

Details for Full Exemption Details:
If the property meets all conditions, the purchaser will be exempt from property transfer tax on the first $500,000 of the purchase price.
If purchased before April 1, 2024, the fair market value must be $500,000 or less to qualify for a full exemption.

EligibilityCriteria for Partial Exemption:

Property must:
Have a fair market value between $835,000 and $860,000 (effective April 1, 2024).
Be larger than 0.5 hectares, or have another building on the property besides the principal residence.

Exclusion:
Foreign entities and taxable trustees are not eligible.

Refunds:
Individuals who don’t initially qualify due to citizenship status but become a Canadian citizen or permanent resident within one year can apply for a refund of the property transfer tax.