The Canada Revenue Agency has provided Canadian citizens with a few beneficial programs that can help them obtain home ownership. The incentives comprise of a Home Buyers Tax Credit, a Home Buyers Plan and a Housing Rebate. If you avail any of these programs, you will be able to reduce your overall costs considerably.

However, you must be a first time home buyer in order to qualify for two of these incentives: the Home Buyers Plan and Home Buyers Tax Credit. The following conditions are essential to be a first time home buyer.

• You must have Canadian nationality.
• You must be a first time home buyer or you should not have lived in a home under your name for the last four years.

Being a first time home buyer is an essential condition, but it is not the only one. There are some other terms which vary with each program.

First Time Home Buyers’ Tax Credit

The First Time Home Buyers Tax Credit is a non refundable amount and must be claimed within the tax year which marks the purchase of a home. You must buy a qualifying house to avail this program. Any house which is single detached or semi detached will qualify. Residences like condominiums, mobile homes and apartment buildings also meet the criteria. It does not matter if they are newly constructed or were already occupied by an individual.

However, you will be given a tax credit only when you make the newly purchased home as your primary residence. The amount can be calculated by multiplying the lowest personal tax rate with $5,000.

The Home Buyers Plan

The Home Buyers Plan or the HBP allows you to withdraw a maximum amount of $25,000 from your Registered Retirement Savings plan or RRSPs. The amount does not incur any taxes and can be obtained without any interest. This is because you are utilizing your own funds. You can then use this amount to pay the down payment for your mortgage loan.

The withdrawn amount must be paid back within a time period of 15 years from the withdrawal date.

GST / HST New Housing Rebate

The GST / HST Housing Rebate can be availed even by those individuals who do not qualify as a first time buyer. This incentive will allow you to receive GST or the federal amount of HST on land and construction costs. However, the purchased home must be at a value which is lower than $450,000 and must be newly built or recently renovated.