Support is out there! 💰
However, there are several ways to save money when purchasing a property in Canada, which could help first-time buyers get onto the property ladder.
From new housing rebates to moving expense deductions, here's a look at where you could cut costs, save at tax time or even get some money back.
Home Buyer's Plan
"Under this program, a 'first-time homebuyer' can essentially borrow off their registered retirement savings plans (RRSPs) on a tax-free basis in order to make a down payment for the purchase of a home," Vittoratos told Narcity.
He said the maximum amount that can be withdrawn from an RRSP account under this program is $35,000, but that's a lot of money if you need the financial boost.
To do this, you need to qualify as a first-time homebuyer, which means you have not lived in a home that you or your current partner owned in the previous four years.
"Starting the second year after the year of the withdrawal, you have 15 years to repay your RRSP through yearly installments paid into your RRSP account," he said.
Home buyer's amount
In the year you purchase a home, eligible first-time homebuyers can claim this non-refundable tax credit of up to $5,000 if you (or your partner) have a qualifying home and have not lived in a property you owned in the previous four years.
This applies to existing homes and homes under construction in Canada and the following properties qualify: single-family houses, semi-detached houses, townhouses, mobile homes, condominium units and apartments in duplexes, triplexes, fourplexes or apartment buildings.
Moving expenses deduction
If you move far away to purchase a new home, you could get a deduction for that.
Vittoratos told Narcity that eligible people who purchase their first home in a new locality (in order to be at least 40 kilometres closer to a new job or university) can deduct expenses related to this move at tax time.
He says you can deduct expenses like transportation and storage, cancelling your lease, travel expenses like meals, fuel, accommodation, and more.
GST/HST housing rebate
If you buy a newly built home (or one that's been substantially renovated), you can claim a rebate on the sales taxes you were charged.
"This rebate is not claimed on the tax return, it is claimed separately through a prescribed form," Vittoratos explained.
There's a lot to go through to find out if you're eligible, but it could help you save a little money!
Home office expenses
OK — so you've bought your property and are all set up.
If you find yourself working from your new home more than expected due to the COVID-19 pandemic, you can actually claim expenses for that!
"Whether you’re an employee or self-employed, you can claim specific expenses related to your home office," Vittoratos said.
"While you don’t have to own your home to be eligible to deduct these expenses, if you’re self-employed, you can deduct such expenses as mortgage interest, property taxes and insurance."
First-time homebuyer incentive
Under this program, eligible first-time buyers could share a part of the cost of buying a home with the Canada Mortgage and Housing Corporation (CMHC).
The program reduces the size of an insured mortgage and lowers monthly mortgage payments.
Qualifying people can get 5% or 10% of the home’s purchase price to put toward a down payment.
Renting out a room
If you've got a little extra space and you decide to rent out part of your home, you can actually deduct any reasonable expenses you incur.
This includes things like "property taxes and insurance, maintenance and repairs," the expert revealed.
Even better, you'll be making some extra money from your new roomie. Perfect!
This article's cover image was used for illustrative purposes only.
- 7 Things I Wish I Knew Before Trying To Buy My First Home In Ontario ›
- 6 Things You Should Know Before Buying Your First Home In ... ›
- 7 Mistakes First-Time Home Buyers Always Make, According To A ... ›
- 7 Ways Students In Canada Can Save Money At Tax Time, According To The CRA - Narcity ›
- Most Gen Zers In Canada Say They'll Buy A House With Their Own Savings & No, We're Not Joking - Narcity ›
- 27 Ways To Save Money On Groceries, Gas, Property & More If You're Broke AF In 2022 - Narcity ›
- A Real Estate Agent Just Explained Why You Should Play 'The Long Game' To Get Your Dream Home - Narcity ›
- Canada Has New Financial Rules & Your Bank Now Has To Alert You If You're Low On Money - Narcity ›
- The CRA Is Sitting On $1.4 Billion In Uncashed Cheques & You Could Receive Hundreds - Narcity ›
- 7 Money Hacks That'll Help You Deal With High Inflation, According To A Financial Expert - Narcity ›