RIHANA PEIMAN
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Helping You Secure Your Financial Future —
• Investment • Insurance • Mortgage Solutions
What You Need to Know as a First- Time Home Buyer
Not yet ready to purchase your first home?
Still working toward your down payment goals?
Homeownership may still be possible with the right long-term financial strategy.
Early mortgage planning and financial guidance can help strengthen your financial profile, prepare you for future qualification opportunities, and create a clearer path toward purchasing a home in Canada.
Start building your homeownership strategy today.
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The first step is the hardest — but you don’t have to take it alone.
FIRST-TIME HOME BUYER INCENTIVE
The First-Time Home Buyer Incentive is a government-backed shared equity mortgage program designed to help eligible Canadians reduce their monthly mortgage payments without increasing their borrowing amount.
Offered through the Government of Canada and administered by Canada Mortgage and Housing Corporation (CMHC), the program provides 5% or 10% of the home's purchase price toward your down payment. This helps lower your mortgage amount and improve overall affordability.
Because this is a shared equity program, the government shares in a portion of the property's future appreciation or depreciation. Repayment is based on the home's fair market value at the time the incentive is repaid.
Key Eligibility Criteria
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Must be a first-time homebuyer
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Household income must be $120,000 or less
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The total borrowing amount cannot exceed 4 times the qualifying income
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The property must be owner-occupied and used as your primary residence
This program may be suitable for buyers looking to enter the Canadian housing market with lower monthly mortgage payments and improved long-term affordability.
MORTGAGE PRE-APPROVAL
A pre-approval provides an estimate of how much you may qualify to borrow, helping you shop within a realistic and comfortable price range.
It can also strengthen your position as a buyer by demonstrating to sellers and real estate professionals that you are financially prepared and serious about purchasing a home.
In Canada, many lenders offer mortgage pre-approvals that may hold an interest rate for up to 120 days, helping protect buyers against potential rate increases while searching for a home.
NEW INSURED MORTGAGE CAP INCREASES TO $1.5 MILLION –
EFFECTIVE DECEMBER 15, 2024
As of December 15, 2024, Canada’s insured mortgage limit officially increased to $1.5 million — the first adjustment since 2012. This change allows eligible homebuyers with less than a 20% down payment to access mortgage default insurance on higher-priced homes.
With home prices continuing to rise in major markets such as Vancouver and Toronto, the updated limit may help improve access to homeownership for more Canadians.
Insured mortgages can offer advantages such as:
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lower down payment requirements
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competitive interest rates
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increased lender flexibility
This update provides greater opportunities for qualified buyers seeking to enter the housing market while maintaining more manageable upfront costs.
Save for Your First Home — Tax Free
Launched in January 2023, the First Home Savings Account (FHSA) is a tax-advantaged registered account designed to help first-time homebuyers in Canada build their down payment savings more efficiently.
The FHSA combines key benefits of both an RRSP and a TFSA:
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contributions may be tax-deductible, similar to an RRSP
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qualifying withdrawals, including investment growth, are tax-free when used toward the purchase of a first home, similar to a TFSA
Eligible Canadians can contribute up to $8,000 annually, with a lifetime contribution limit of $40,000.
Because contributions may reduce taxable income while allowing tax-free growth and withdrawals for a qualifying home purchase, the FHSA has become one of the most effective savings tools available for future homebuyers in Canada.
30-YEAR MORTGAGE AMORTIZATION FOR FIRST-TIME HOMEBUYERS AND NEW BUILDS – NOW
As of December 15, 2024, the Government of Canada expanded eligibility for 30-year mortgage amortizations to include:
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all first-time homebuyers
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all buyers purchasing newly constructed homes, including condominiums
This policy change is intended to help improve housing affordability by reducing monthly mortgage payments for qualified buyers.
Longer amortization periods can help lower monthly carrying costs, providing additional financial flexibility — particularly in higher-priced markets such as Vancouver and Toronto.
This update builds on measures introduced in Budget 2024, which previously allowed 30-year amortizations for first-time homebuyers purchasing newly built homes beginning August 1, 2024.
The expanded policy is also intended to encourage the purchase of newly constructed housing while supporting broader efforts to increase housing supply across Canada.
HOME BUYER's PLAN
The Home Buyers’ Plan (HBP) allows eligible Canadians to withdraw funds from their Registered Retirement Savings Plan (RRSP) to help purchase or build a qualifying home for themselves or for a specified person with a disability.
Under the current rules, eligible individuals may withdraw up to $60,000 from their RRSPs through the HBP. This increased withdrawal limit applies to withdrawals made after April 16, 2024.
Funds may be withdrawn from more than one RRSP, provided you are the annuitant of each account. Eligible withdrawals under the HBP are not subject to withholding tax at the time of withdrawal. Certain RRSPs, including some locked-in or group RRSPs, may not permit HBP withdrawals.
Amounts withdrawn through the HBP must generally be repaid to the RRSP over a period of up to 15 years.
Key Eligibility Requirements
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You must qualify as a first-time homebuyer
(this condition may not apply when purchasing for a specified person with a disability) -
You must have a written agreement to buy or build a qualifying home
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You must be a resident of Canada from the time of withdrawal until the home is purchased or constructed
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You must intend to occupy the property as your principal residence within one year of purchase or completion
The Home Buyers’ Plan can be an effective strategy for eligible buyers looking to use existing RRSP savings toward a future home purchase while maintaining long-term financial flexibility.
FIRST-TIME HOME BUYERS' TAX CREDIT
The Government of Canada increased the amount used to calculate the Home Buyers’ Tax Credit (HBTC) to $10,000, allowing eligible first-time homebuyers to claim a non-refundable tax credit of up to $1,500.
The HBTC is designed to help offset some of the costs associated with purchasing a home, including legal fees, closing costs, land transfer taxes, and moving expenses.
To qualify, you must generally:
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be considered a first-time homebuyer
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purchase a qualifying home located in Canada
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intend to occupy the property as your principal residence
Eligible property types may include:
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detached homes
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townhouses
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condominiums
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mobile homes
The credit can be claimed on your personal income tax return for the year in which the home was purchased.
The HBTC is one of several government programs intended to help support Canadians entering the housing market and managing the upfront costs of homeownership.
GST/HST NEW HOUSING REBATE – SAVE THOUSANDS WHEN BUYING OR RENOVATING YOUR HOME
The GST/HST New Housing Rebate may allow eligible homebuyers to recover a portion of the Goods and Services Tax (GST) or the federal portion of the Harmonized Sales Tax (HST) paid on a newly built home, a substantially renovated home, or certain owner-built properties.
The rebate generally applies when the property is intended to be used as the primary residence of the purchaser or an immediate family member, subject to meeting all eligibility requirements established by the Government of Canada.
In addition to the federal rebate, some provinces may also offer provincial new housing rebates that can help reduce the provincial portion of the HST, depending on the location of the property.
In British Columbia, eligible buyers may qualify for a federal GST rebate of up to $6,300.
This program may be especially beneficial for:
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first-time homebuyers
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buyers purchasing newly constructed homes
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homeowners completing substantial renovations
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individuals building custom homes
Understanding eligibility requirements and applying properly may result in significant tax savings during the home-buying or renovation process.
LAND TRANSFER TAX REBATES FOR FIRST-TIME HOME BUYERS – SAVE ON CLOSING COSTS
Many Canadian provinces, including British Columbia, offer land transfer tax rebates or exemptions to help first-time homebuyers reduce upfront closing costs when purchasing a home.
In British Columbia, eligible buyers may qualify for a full or partial exemption from the Property Transfer Tax (PTT), depending on the property's purchase price and other eligibility requirements.
In British Columbia
To qualify for a full exemption, the property must generally:
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be a residential property
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have a fair market value of $835,000 or less
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be used as your principal residence
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meet all applicable first-time homebuyer eligibility requirements
If the property value is between $835,000 and $1,000,000, a partial exemption may still be available.
The First-Time Home Buyers’ exemption can help reduce closing costs and improve affordability for eligible buyers entering the housing market.
Because eligibility requirements and thresholds may change over time, it is important to review the most current provincial guidelines before purchasing a property.