Buying your first home is an exciting milestone, but it’s also natural to feel overwhelmed by the financial commitment, down payment requirements, and closing costs. The good news is that both the federal and provincial governments offer programs designed specifically to help first-time home buyers make the transition into homeownership more affordable.
If you’re considering purchasing your first home in Ontario, understanding these incentives could help you save thousands of dollars and make your homeownership goals more achievable.
2. Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows eligible first-time buyers to withdraw funds from their RRSP to use toward a down payment without paying immediate tax on the withdrawal.
Currently, buyers can withdraw up to $60,000 from their RRSP through the program. Couples purchasing together may be able to access up to $120,000 combined. The funds must eventually be repaid to the RRSP over time, but the program can provide a significant boost to your down payment savings.
Why it matters:
· Access RRSP savings without immediate tax consequences
· Increase your down payment
· Potentially reduce mortgage insurance costs by increasing equity