When you’re a first-time homebuyer, it’s important to learn about the various programs in place to help you make your first purchase. Including the RRSP Home Buyers’ Plan, there are a few other federal and provincial programs that help new buyers get into the market by making homeownership more affordable.
When buying with a partner that’s not a first-time homebuyer however, things can get a little more complicated. Let’s look at the situation if you and your partner, who is not a first-time homebuyer (FTHB), live in Toronto:
|Program||Description||Maximum, if you buy alone||Maximum with FTHB partner||Maximum with non-FTHB partner||Maximum with non-FTHB spouse|
|First-Time Home Buyers' Plan||Withdraw money from your RRSP tax-free for your down payment||$25,000||$50,000||$25,000||$25,000|
|First-Time Home Buyers' Tax Credit||Federal tax relief||$750||$750||$750||$03|
|Ontario Land Transfer Tax Rebate||Receive a rebate on your provincial land transfer tax||$2,000||$2,000||$1,0001||$02|
|Toronto Land Transfer Tax Rebate||Receive a rebate on your municipal land transfer tax||$3,725||$3,725||$1,862.501||$02|
1. Typically, the split between buyers is 50/50, meaning you can claim 50% of the land transfer tax payable, up to $1,000. However, the amount of property tax you can claim is relative to your share in the home purchase. For example, if the split between you and your partner is 70/30, you can claim 70% of the land transfer tax payable, meaning up to $1,400.
2. If your spouse is not a FTHB but they sold their home before you married one another, you are entitled to apply for a land transfer tax rebate of up to 50%, or your share of the property, of the LTT payable.
3. If you have not lived in another home purchased by your spouse in the year of acquisition or the four years prior, you are eligible to claim the FTHB Tax Credit.
Also, note that a person who has owned a property can become a FTHB again. If you’ve owned a home and sell it, you can purchase another home as a FTHB after three years.
Now let’s break down each program:
If you meet the eligibility requirements, each Canadian can withdraw up to $25,000 tax-free to put toward their down payment. If your partner is not a first-time homebuyer, you can still withdraw up to $25,000, as long as you haven’t lived in your partner’s owned property in the last four years. For more information, including eligibility, requirements, read our full page on the Home Buyers’ Plan.
As part of Canada’s Economic Action Plan, this is a $750 tax credit for first-time homebuyers1 as long as you can show at least $5,000 in home purchase expenses, including land transfer tax. Both you and your partner must not have lived in a home for the previous four calendar years that either of you owned.
When two first-time homebuyers purchase together, including as spouses, you can claim a combined total of $750, but no more.
If you’ve never bought a home before, you can recover some of your Ontario land transfer tax2, up to a maximum of $2,000. If your partner is your spouse and owned a home while being your spouse, you are both ineligible for a rebate.
However, if your spouse sold the home before getting married, you may apply for 50% of the LTT payable, or your portion of the home purchase, if the split is not 50/50. The same rule applies to buying partners: you can apply for your share of the land transfer tax payable if your partner is not a FTHB.
Because residents of Toronto pay both provincial and municipal land transfer tax, they may be eligible for rebates3 on both. In Toronto, you can receive up to $3,725; however, similar to the Ontario land transfer tax, if your partner is your legal spouse and has owned a home at any time while being your spouse, neither of you are eligible for a rebate.
However, if you purchase with a partner who is not a FTHB, or if your legal spouse sold their home before you got married, you are eligible to apply for your share of the land transfer tax payable.
If you qualify as a first-time homebuyer in BC4 but your spouse does not, you are still eligible for tax exemption on your portion of the home. For example, if you own 50% of the home, 50% of the tax amount is eligible for the exemption.
If you’re buying in Saskatchewan and want to take advantage of this rebate5, both you and your spouse must not have owned a home this year and in the previous four calendar years. This non-refundable tax credit is up to $1,100.
Nova Scotia offers a rebate6 of up to $3,000 on newly built homes only. When buying your first home in Nova Scotia, neither buyer can have owned a home in the last five years. If either of you have, the entire tax amount is ineligible for rebate.
1 Canada’s Economic Action Plan 2 Ontario Ministry of Finance: Land Transfer Tax Refunds for First-Time Homebuyers 3 City of Toronto: Rebate Opportunities 4 Province of British Columbia: First Time Home Buyers’ Program 5 Government of Saskatchewan: First-Time Homebuyers’ Tax Credit 6 Government of Nova Scotia: First-Time Home Buyers Rebate