First-Time Home Buyer & Home Buyers’ Plan (HBP) Guidance
Maximize Your Tax Benefits as a First-Time Home Buyer in Canada
Buying your first home is a significant financial milestone, and the Canada Revenue Agency (CRA) offers tax incentives and programs to help make homeownership more affordable. First-time homebuyers can take advantage of tax credits, RRSP withdrawals under the Home Buyers’ Plan (HBP), and tax-free savings in a First Home Savings Account (FHSA).
At Westview Accounting & Tax Services Inc., we provide expert tax planning for first-time homebuyers in North Vancouver, BC. We help you access available tax credits, structure your RRSP withdrawals, and maximize government incentives to make your first home purchase more financially manageable.
What Tax Benefits Are Available for
First-Time Home Buyers?
What Tax Benefits Are Available for First-Time Home Buyers?
Home Buyers’ Tax Credit (HBTC) – Line 31270 on T1 Return
A non-refundable tax credit of $1,500 (based on a $10,000 claim amount).
Reduces the taxes owed on your return.
Can be split between spouses or common-law partners.
Home Buyers’ Plan (HBP) – RRSP Withdrawal (T1036)
Allows you to withdraw up to $35,000 tax-free from your RRSP to buy a home.
If purchasing with a spouse or partner, both can withdraw up to $35,000 each, for a total of $70,000 tax-free.
Must be repaid over 15 years, starting the second year after withdrawal to avoid taxation.
First Home Savings Account (FHSA) – Tax-Free Savings for a Down Payment
Contributions are tax-deductible, similar to an RRSP.
Withdrawals for home purchases are completely tax-free, like a TFSA.
Annual contribution limit: $8,000 (Lifetime max: $40,000).
Unused FHSA funds can be transferred to an RRSP without affecting RRSP contribution room.
GST/HST New Housing Rebate (RC4028 – GST/HST New Housing Rebate Application)
If you purchase a newly built home, you may qualify for a rebate on the GST or HST paid.
Property Transfer Tax (PTT) Exemption for First-Time Buyers (BC Only)
Full exemption on BC’s Property Transfer Tax (PTT) for homes under $500,000.
Partial exemption for homes between $500,000 and $525,000.
If the purchase price is over $525,000, no exemption applies.
Maximizing TFSA Contributions (T1 Schedule 3)
Tax-Free Investment Growth & Withdrawals
All income earned inside a TFSA is tax-free, including interest, dividends, and capital gains.
Unlike RRSPs, withdrawals don’t count as taxable income and can be re-contributed the next year.
Best for Long-Term Investing & Emergency Funds
Ideal for saving for major purchases, retirement, or emergency funds without tax consequences.
Contribution Room Accumulates Over Time
Unused TFSA room carries forward indefinitely.
The 2024 annual limit is $7,000, but if you’ve never contributed, you may have up to $95,000 in available room (since 2009).
Avoid Over-Contributions (CRA Penalties Apply)
Over-contributions are subject to a 1% monthly penalty until corrected.
TIP: By strategically using these programs, first-time buyers can significantly reduce the upfront and long-term costs of homeownership.
Who Qualifies as a First-Time Home Buyer?
You (or your spouse/common-law partner) have not owned a home in the last four years.
You are purchasing a qualifying home in Canada (house, condo, townhouse, mobile home, etc.).
You intend to occupy the home as your primary residence within one year of purchase.
For the HBP, you must be a Canadian resident at the time of RRSP withdrawal.
TIP: Even if you previously owned a home, you may still qualify if you haven’t owned one in the last four years.
How the Home Buyers’ Plan (HBP) Works
Withdraw Up to $35,000
Tax-Free from Your RRSP
Complete Form T1036 – Home Buyers’ Plan Request to Withdraw Funds from an RRSP. Your RRSP provider will process the withdrawal without tax deductions.
Use the Funds for a
Home Purchase
Must be used to buy or build a qualifying home. The purchase must be completed by October 1 of the following year.
Repayment Begins in
the Second Year
Repay 1/15 of the amount withdrawn annually over 15 years. If you miss a repayment, the required amount is added to your taxable income.
Strategic Home Savings:
FHSA vs. RRSP HBP – Which Should You Use?
Best for Higher-Income Earners
Use the RRSP Home Buyers’ Plan (HBP) to maximize tax deductions before withdrawal.
Best for Flexible, Tax-Free Withdrawals
Use an FHSA if you don’t want to worry about repayments and tax implications.
Best for Long-Term Home Savings
Combine RRSP & FHSA to maximize savings and reduce taxable income.
Example: If you contribute $8,000 annually to an FHSA for 5 years, you get $40,000 tax-free toward a down payment. If you also contribute to an RRSP
and withdraw under the HBP, you can add up to $35,000 more, giving you a combined $75,000 tax-free for a home purchase.
Strategic Home Savings:
FHSA vs. RRSP HBP – Which Should You Use?
Strategic Home Savings: FHSA vs. RRSP HBP – Which Should You Use?
Best for Higher-Income Earners
Use the RRSP Home Buyers’ Plan (HBP) to maximize tax deductions before withdrawal.
Best for Flexible, Tax-Free Withdrawals
Use an FHSA if you don’t want to worry about repayments and tax implications.
Best for Long-Term Home Savings
Combine RRSP & FHSA to maximize savings and reduce taxable income.
Example: If you contribute $8,000 annually to an FHSA for 5 years, you get $40,000 tax-free toward a down payment. If you also contribute to an RRSP
and withdraw under the HBP, you can add up to $35,000 more, giving you a combined $75,000 tax-free for a home purchase.
How Westview Helps First-Time
Home Buyers with Tax Optimization
How Westview Helps First-Time Home Buyers with Tax Optimization
Determining Eligibility for
First-Time Buyer Programs
We confirm if you qualify for the HBTC, HBP, FHSA, and BC Property Transfer Tax Exemption.
Strategic RRSP & FHSA
Contribution Planning
We ensure your contributions are optimized before withdrawal to reduce taxable income.
GST/HST & Land Transfer
Tax Rebate Assistance
We help you apply for tax rebates on new homes
and land transfer fees.
Tracking RRSP HBP Repayments
We assist in monitoring your repayment schedule to avoid tax penalties.
Home Purchase Tax Planning
We provide strategies to minimize the tax impact of homeownership over time.
Why Work with Westview Accounting & Tax Services Inc.?
At Westview Accounting & Tax Services Inc., we combine deep expertise with personalized service. Our team takes the time to understand your unique financial situation and offers tailored advice to ensure your return is accurate, compliant, and optimized for maximum refunds. We don’t just file your taxes—we help you plan smarter for the future. Whether you’re a newcomer, business owner, or retiree, you can trust us for clear guidance, strategic savings, and peace of mind all year long.
Experienced accountants
Transparent, upfront pricing
Professional review of all tax documents
Personalized advice for your financial goals
Convenient online or in-person filing options
Claim Your First-Time Home Buyer Tax Benefits & Save Thousands!
Buying a home is a major financial decision, and taking advantage of tax credits, rebates, and RRSP withdrawal programs can save you thousands. Let Westview Accounting & Tax Services Inc. guide you through the Home Buyers’ Plan, tax credit claims, and rebate applications in North Vancouver, BC.
Contact Us Today! Get expert tax guidance for first-time home buyers!
Westview Accounting provides trusted accounting, tax, and bookkeeping services across North Vancouver and Surrey. We help individuals and businesses stay compliant, informed, and financially confident.