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Central Alberta is a beautiful place with many neighbourhoods that are perfect for first-time homebuyers. However, buying a home can be a daunting task, especially with the rising cost of living brought about by inflation and constantly rising interest rates. For some of us, buying the first home in Central Alberta may be a dream out of reach.  

The good news is that there are benefits and incentives to help first-time home buyers across Canada to make owning a home more affordable.  

Learn more about these programs and their qualifications in this blog.  

RRSP Home Buyers' Plan 

According to Ratehub, you may qualify for a registered retirement savings plan (RRSP)’s Home Buyers Plan if you haven’t purchased a home, or resided in a house under your partner’s name, in the last four years.  

An RRSP can save you thousands of dollars in tax when used carefully. As a first-time home buyer, you can borrow up to $35,000 RRSP tax-free.  

To do this, you must fill your RRSP up to $35,000. Then, using the Home Buyer's Plan, you can withdraw the money without paying tax. The catch is that the money should be in your RRSP at least 90 days before you buy your house.  

However, you need to be careful when using this plan. The government requires you to repay your RRSP account over the next 15 years. It is best to repay the RRSP as soon as possible because any amount that is left unpaid every year will be added to your income and you will have to pay tax on this amount.  

Here’s the link to the government page about this program: Home Buyers' Plan 

First-Time Homebuyer Incentive 

This program was launched by the Canada Mortgage and Housing Corporation (CMHC) back in 2019. This helps qualified first-time home buyers across the country with an interest-free loan. This contributes from 5% (existing home) to 10% (newly built home) to put toward a down payment. You will have to repay this loan within 25 years or once you sell the house, whichever comes first.  

Through this incentive, you can significantly reduce your regular mortgage payments over time. 

The catch is that while this is interest-free, the amount of money you have to repay also fluctuates depending on the value of your home.  

To learn more about this incentive and its qualifications, visit this link: First-time Home Buyer Incentive 

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GST New Housing Rebate 

I know you are thinking that buying a newly built home is expensive, but it may be a good time to get one.

According to recent reports, the market in Central Alberta is hot for newly built homes. Another thing that makes buying newly built homes attractive is that you can actually get your money back as long as you qualify for a GST New Housing Rebate.  

How does it work?  

When buying a new build, you have to pay the GST on top of the purchase price. When purchasing a home under $450,000.00, you may qualify for a GST rebate of up to $6,300. The rebate is 36% of the federal component (of the tax on homes under $350,000, or a flat rate of $6,300 on homes between $350,000 and $450,000.  

To qualify for this rebate, you must:  

• Have listed your home as your primary place of residence 

• Have purchased a new or substantially renovated single family, duplex, condo, townhouse, mobile home, or modular home from a builder or a share of interest in a co-operative home 

Other than new builds, this rebate also applies for substantially renovated existing homes, or rebuilt homes that was destroyed by a fire.  

First Time Home Buyers' Tax Credit 

This tax credit, also known as the Home Buyers’ Amount, lets first-time home buyers recover a portion of the costs associated with their purchase. The Home Buyers' Tax Credit was recently increased to $1,500 from $750. First-time home buyers can claim this credit within the year they purchased a home.  

For more details, visit the Government of Canada’s website here. 

CMHC Eco Plus 

Once called the CMHC’s Green Home program, this program has been renamed CMHC Eco Plus last June 2022.  

The CMHC Eco Plus's goal is to make energy-efficient and low-carbon housing choices more affordable. This program incentivizes those who buy or renovate high-performing sustainable homes by letting homebuyers have up to 25% of their CMHC Mortgage Insurance premium refunded!

Not only is this incentive helpful for home buyers, but it also contributes to the country’s effort to the impact of housing on climate change. 

To help you find the best first-time home buyer incentives for you and assist you with the requirements, it is best that you talk to a certified mortgage professional. Contact us so we can share with you our list of preferred professionals in the Red Deer and Central Alberta area.