Government of Canada programs to support homebuyers in 2024

This article has been updated from a previous version.  

It’s no secret that Canada’s housing market is feeling the effects of high inflation and Bank of Canada’s nine successive interest rate hikes.   

According to the Canadian Real Estate Association (CREA), the average home price is expected to increase by 4.9% annually, reaching $710,468 in 2024. This forecast represents more than twice the initial estimate made at the beginning of the year. 

In a high interest rate environment, prospective buyers can use all the help they can get. Luckily, the Government of Canada offers a number of homebuyer assistance programs that can make the financial pain of that big purchase a little easier to handle.  

Here are just a few home ownership incentive programs in Canada.  

First Home Savings Account (FHSA) 

A First Home Savings Account (FHSA) is a government-registered plan designed for saving towards your first home purchase.   

It offers the dual benefit of tax-deductible contributions and tax-free savings, which means you won't pay taxes on deposits, nor will you pay taxes on the interest earned or the growth of your savings within the account. This can boost your savings over time.  

There’s an annual contribution limit of $8,000 a year to a lifetime limit of $40,000. 

To open an FHSA, you must meet the following eligibility criteria: 

• You must be an individual resident of Canada. 
• You must be at least 18 years of age. 
• An individual must be a first-time home buyer. 

Related: Six common mistakes first-time homebuyers make

Home Buyers' Amount 

One of the benefits of being a first-time buyer is that when tax season rolls around, you can apply for a healthy deduction. The Home Buyers’ Amount — also referred to as the first-time homebuyers’ tax credit — allows first-time home buyers in Canada to claim a $10,000 tax credit for the purchase of a qualifying home, which includes existing homes and those under construction.   

The amount you get back from the CRA depends on the lowest personal income tax rate for the year you bought your home.  

The current rate is 15%, which results in a maximum rebate of $1,500. To claim this tax credit as a first-time homebuyer in Canada, fill out line 31270 on your yearly income tax return.  

Home Buyers' Plan (HBP)  

If you have a Registered Retirement Savings Plan (RRSP) and you are a first-time home buyer, you can dip into it tax-free to buy your home via the Home Buyers' Plan. Currently, the withdrawal limit to $60,000 beginning in the 2024 tax year. The new grace period to begin repayment is five years, and you have 15 years after that to complete paying back the withdrawn funds.  

GST/HST New Housing Rebate  

People buying a home in a new building, or even building their own home in 2024, can take advantage of the GST/HST New Housing Rebate. The rebate will cover some of the GST or the federal part of the HST you paid.  

You can apply for the rebate by filling out the New Housing Rebate Application for Houses Purchased from a Builder, and filing it with Revenue Canada. Those living in Ontario also need to fill out the Ontario Rebate Schedule . If you are building your own home, you’ll also need to submit a construction summary worksheet.  You will also have to include supporting documents if a vendor didn’t charge you HST or GST on your invoice.  

CMHC Eco Plus  

An energy-efficient home doesn’t just help the environment — it also nets you some savings.  

If your mortgage is CMHC-insured and your newly purchased house or condo is built to certain energy standards, you can claim a CMHC Eco Plus rebate of up to 25% on your mortgage loan insurance premium.  

The rebate is currently meant for newer and newly constructed homes. So, if you’re looking for a new home, consider choosing one that’s been certified by a program recognized by the CMHC Eco Plus program. The programs vary from province to province and may include LEED Building Design, Energy Star, Novoclimat and others.  

It must also have a recent EnerGuide rating provided by a National Resource Canada (NRCan)-approved energy advisor.   

To apply, fill out the application, and send the completed application with your home’s energy report, to the Canada Mortgage and Housing Corporation. Your application must be submitted within 24 months from the closing date of your mortgage. 

Related: What is mass timber construction, and how is it insured? 

Regional down payment assistance programs  

Maybe you don’t qualify for one or more of Canada’s homebuying programs because your income is too low. The good news is that you still have options. Most provinces, and even some municipalities, have down payment assistance in place.  

In Prince Edward Island, for instance, eligible buyers can get a conditionally interest-free loan of 5% of the purchase price. And in Manitoba, the Rural Homeownership Program has a pathway that makes it easier to purchase a home outside of major cities.  

 Canada’s homebuying programs can significantly help lower the amount you’ll pay for your home. Make sure to consider all homeownership assistance programs in your province to ensure you’re not leaving any money on the table when it comes time to buy a home. 

Read next: Should I get a mortgage from a broker or a bank?