Buying your first property is a major financial milestone, and one you should feel incredibly proud of. Many Canadians strive to be able to call a property their very own. Especially in 2023 with hard financial times hitting the entire economy. If 2022 was the year you made the leap to home ownership for the first time, you aren’t alone, and we’ve got plenty of information to keep you up to date and ready to make the best decisions in your real estate journey.
There’s no doubt that being a first-time home buyer can feel overwhelming. Whether you’re learning about the differences between fixed and variable mortgages, understanding prepayment penalty fees or shopping for a mortgage rate, you made a lot of decisions in a short amount of time. You’ve had to talk to many different people from realtors to lawyers, and provide mountains of documents to prove your income.
Hopefully, you did your research, evaluated different lenders, and found the mortgage that’s right for you which could have saved you thousands over the length of your mortgage.
Now that you’re officially a homeowner, we wanted to share some important information for first-time buyers in Canada so that you can save even more money.
1. Claim your First-Time Home Buyers Tax Credit
Also called the Home Buyers’ Amount, this offers eligible homeowners a $10,000 non-refundable income tax credit on a principal residence. This translates into a $1500 tax rebate back in your wallet. The tax-filing deadline for 2023 is Sunday, April 30. Since April 30, 2023, falls on a Sunday, your return will be considered filed on time as long as it is received by the Canada Revenue Agency (CRA) on or before Monday, May 1, 2023. You have until Thursday, June 15, 2023, to file your tax return if you or your spouse or common law-partner are self-employed.
2. Is your home a new build? Claim the GST/HST New Housing Rebate
If you paid a Goods and Services Tax (GST) or Harmonized Sales Tax (HST) on a new or substantially renovated house, condo or duplex, you may be eligible for this rebate. In 2021 the government made changes to the GST/HST New Housing Rebate, which covers all newly built properties including homes that had substantial renovations done to them. This rebate saves you on the sales tax involved in purchasing a newly built home, or one that you built or renovated yourself, and could give you a kick back of a few thousand dollars.
3. Repayments to the RRSP Home Buyers’ Plan start the second year after you withdrew funds
If you withdrew funds through the Home Buyers’ Plan in 2022, your first year of repayment starts in 2024. You have up to 15 years to repay your RRSP. Each year, you can view your remaining balance on your notice of assessment sent by the Canada Revenue Agency.
4. View monthly property value estimates with Perch
For first time homebuyers one of the most common sources of anxiety is the value of their home going down. If the worst comes to worst and you end up having to sell your home for less than you purchased it, you don’t want to end up in a short-sale situation.
At Perch, we’ve developed a tool based on the most up-to-date data that allows you to easily track your mortgage balance and view your latest property value estimates every month. Our insight tools are designed to help you make the best choices when it comes to your home. Thinking about a renovation project? See how much home equity you can access if you refinance, or calculate the costs of breaking your mortgage.
5. Consider upgrades to make your property more energy efficient
The Canada Greener Homes Grant provides eligible homeowners with up to $5,000 in rebates to retrofit their principal residence. If you were planning on replacing your windows and doors, installing a heat pump or adding insulation, this is the grant for you. Roof-top solar panels are becoming more and more popular and the Canadian government is offering these incentives to encourage homeowners to buy and renovate with their ecological footprint in mind.
For many first-time home buyers, that initial year of owning a home can get expensive—fast. You’re adjusting your budget to carry a mortgage, buying new furniture and home maintenance tools, and thinking about potential renovation projects. Take full advantage of any tax credits and government rebates to add a little breathing room to your budget.
If any of these tips were useful for you, then you’ll probably also benefit from reading other articles for first-time homebuyers and owners on our blog. At Perch, our goal is to make homeownership simple.