OTTAWA – Financial organizations across the country are reminding first time home buyers about available financial tools and resources during November, which is Financial Literacy Month.
There are a number of benefits, credits and tax incentives administered by the Canada Revenue Agency, and of course, filing an income tax return is the first step to qualify for them.
Available tax credits include:
- First Home Savings Account (FHSA)
This is a registered account that could allow people to save for their first home with tax advantages. Contributions are generally tax deductible and withdrawals for the purpose of buying or building a qualifying home are tax-free.
- Home Buyers’ Plan(HBP)
The HBP could allow people to withdraw up to $35,000 from their registered retirement savings plan (RRSP) to buy or build a home for themselves or a related person with a disability. The withdrawal is tax-free if it is paid back within the required timeframe.
Withdrawals from FHSA and RRSP’s under the HBP for the same home are possible, as long as individuals meet all of the conditions at the time of each withdrawal.
The HBTC could allow first-time home buyers who acquire a home to claim a non-refundable tax credit of up to $1,500.
- The GST/HST rebate is available for new home purchases and could reduce upfront costs to help make homeownership more affordable.
Aside from the incentives administered by the CRA, there are also other programs available for first-time home buyers, including a first-time home buyer incentive and new construction funding for Indigenous housing for on and off reserve communities in Canada.
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