Financing for first time home buyers

Are you dreaming of owning your first home in Montreal?

Buying a home for the first time can be a nerve-racking task; it is definitely a high cost investment and a big decision. Usually, first-time homebuyers face financial challenges in the acquisition of a condo or a house. Getting off to a good start can make all the difference, which is why it is very important to get informed about the financial assistance available. Upon careful review, you will be better able to make the best decision that will enable you to own your first home. 

Here are some valuable tips that will help potential new homebuyers realize their ownership dream.


HOME BUYERS’ PLAN

The Home Buyers’ Plan is a program that allows you to withdraw up to $25,000 a year from your RRSP (registered retirement savings plan) to buy a qualifying home for yourself or for a related person with a disability. In other words, it is a non-taxable loan withdrawal that provides a homebuyer with enough cash to meet the down payment required for the purchase of the property. The individual who uses the HBP will have 15 years to reimburse the full amount of the withdrawal.

Eligibility conditions?

You must be considered a first-time homebuyer.
You must have a written agreement to buy a qualifying home for yourself, for a related person with a disability, or to help a related person with a disability buy or build a qualifying home (obtaining a pre-approved mortgage does not satisfy this condition).


HOME OWNERSHIP PROGRAM

The Home Ownership program can help you make your dream more attainable. 

With this program you can take advantage of:

A lump sum financial assistance when you purchase a new property;
A refund of your "welcome" tax if you are a family with at least one child who is under 18 and you purchase a new property or an existing residential building with 1, 2 or 3 above-ground dwelling units;
Easier eligibility to the Ville de Montréal Major Residential Renovation and Renovation à la carte programs when you purchase an existing residential building with 1, 2 or 3 above-ground dwelling units.

Eligibility conditions?
Households who buy a first property that is a new residential unit;
Families with at least one child under 18 who buy a first property that is an existing residential building with 1, 2 or 3 above-ground dwelling units;
Families with at least one child under 18 who already own a property (or have owned one in the last 5 years) and purchase a newly-built 3-bedroom property.


FIRST-TIME HOME BUYERS' (FTHB) TAX CREDIT

The costs associated with purchasing a home, such as legal fees, disbursements and land transfer taxes are particularly high. The Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009.

The credit for a taxation year will be calculated by reference to the lowest personal income tax rate for the year and is claimable for the taxation year in which the home is acquired.

Eligibility conditions?

An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years. 

A qualifying home is one that is currently eligible for the Home Buyers’ Plan that the individual or individual’s spouse or common-law partner intends to occupy as the principal place of residence not later than one year after its acquisition.


PRIVATE PROGRAMS

Homebuilders are also looking for ways to attract buyers. As competition gets tougher in the Real Estate market, many builders are offering incentive programs. The advantages vary, but one common option is the possibility of a smaller down payment, to which the builder adds a contribution.

To obtain more information on the First-Time Home Buyers’ Tax Credit and the Home Buyers’ Plan, call 1-800-O-Canada or visit the Canada Revenue Agency website at www.cra.gc.ca.

Now that you know about the beneficial programs offered by the City of Montreal, you are one step closer to financing your first home!