For example, did you know the government has a number of programs in place that can help you afford your new home?
Take a look!
The First-time Home Buyers' Tax Credit
Also known as the HBTC, the first-time home buyer's tax credit offers an income tax credit for the purchase of a qualifying home.
The way the HBTC is calculated is by multiplying $5,000 by the lowest personal income tax rate for the year in which you bought the home.
In order to qualify for the HBTC, you must both:
Buy a qualifying home (with your spouse or common-law partner (where applicable); and
Have not lived in a home owned by either you, your spouse, or common-law partner (where applicable) over the previous four years.
In other words, if you last lived in a home that you (and/or your spouse or common-law partner) owned more than five years ago, you can qualify for the HBTC even if the new home you're purchasing is not, technically, your first home.
For individuals with a recognized disability, or for individuals buying a home for a family member with a disability, you can qualify for the HBTC even if it's not your first home. In order to qualify, the new home must be specifically purchased in order to help the individual with the disability live in an environment better suited to their needs and care.
The HBTC is available for detached single-family homes, semi-detached houses, townhouses, duplexes, triplexes, condominiums, and apartments.
The Home Buyer's Plan
Often abbreviated as HBP, the Home Buyer's Plan allows you to withdraw up to $25,000 per year from a registered retirement savings plan (RRSP) in order to buy or build a home for yourself or someone with a disability.
In order to qualify for the HBP, you must:
Be a first-time home buyer; and
Have a written agreement to buy or build the home for yourself or for a family member with a disability.
Just as with the HBTC, a "first-time home buyer" is someone who has not lived in a home that they (or their spouse/common-law partner) owned for the past four years. You are allowed to withdraw up to $25,000 per calendar year. Be aware that the RRSP will not withhold tax from any withdrawn funds.
The rules of the HBP require that you begin making repayments to the RRSP on the second year after you withdrew the money. The HBP program allows you up to 15 years to repay the full amount back to your RRSP with no fees or penalties for early payments. Repayments do not affect any existing deduction limits.
The GST New Housing Rebate
For home buyers in Alberta, the federal government offers a GST rebate for individuals buying a new home.
In order to qualify:
You must buy a new home, build a new home, or substantially renovate (at least 90% of the interior is replaced) a home on land that you own or is leased for at least 20 years; and
The new home must be your primary place of residence.
The GST rebate program is only available for individuals, not corporations or partnerships.
In order to qualify, there are no paperwork or documentation requirements except for photocopies of invoices showing the vendor in question charged GST. You will have to fill out a form in order to gain back any GST you've paid. The Canada Revenue Agency asks that you keep all of your original invoices and documents for six years.
Currently, the rebate offered is 36% of the GST you paid when buying or building a qualifying home. The rebate can be up to $6,300 for homes valued at $350,000 or less. For homes valued between $350,000 and $450,000, there's a partial rebate available. For homes valued at more than $450,000, there is no rebate.
Due to the complexity, it may be advisable to consult a tax professional before filing the paperwork to get a GST rebate.
The government of Alberta has a number of rebate programs available to encourage home buyers and builders to upgrade to energy-efficient appliances and systems.
Although saving up for a down payment requires fiscal discipline and hard work, you can also, thankfully, seek out government programs to help you save money. If you find you're eligible, why not use the help to get into the home you deserve? Buying a home is a big investment – it pays to be smart about it.
For more resources, consider these 5 down payment options you can take advantage of .