Jessica and Mike just got engaged and are excited to buy their first home together.
While Jessica has never owned property, Mike sold his downtown condo two years ago before they met. As they start house hunting, they wonder if they can access first-time homebuyer benefits as a couple. "I owned before, but Jessica hasn't - what does that mean for us?" Mike asks their real estate lawyer.
According to the Government of Canada's website, in order to qualify as a first-time home buyer, You must have not, at any time in the current calendar year or preceding four calendar years, lived in a home you owned, or jointly owned, or that your spouse or common-law partner owned or jointly owned, anywhere in the world.
First-Time Homebuyer Incentives in Canada in 2025
There are numerous benefits to being a first-time homebuyer in Canada in 2025. To understand why Mike was asking the question, let’s walk through each program to see what Jessica and Mike qualify for. Since Mike sold his property only two years ago (not the required four years to qualify as a first-time home buyer as), they would face some limitations as a couple.
Home Buyers' Plan (HBP)
In Jessica and Mike's case, Jessica can withdraw up to $35,000 from her RRSP tax-free as a first-time buyer, but Mike cannot. Why? Because the HBP requires participants to not have owned a home in the previous four years, and Mike is only two years out from his condo sale. However, they can still leverage Jessica's eligibility to access $35,000 from her RRSPs tax-free for their down payment.
First-Time Home Buyer Incentive (FTHBI)
Unfortunately, Jessica and Mike wouldn't qualify as a couple for the First-Time Home Buyer Incentive. This federal program requires that neither spouse has owned a property in the last four years. Even though Jessica qualifies individually, they must apply as a couple since they're buying together, making them ineligible until Mike reaches the four-year mark.
Land Transfer Tax Rebates
Some good news for Jessica and Mike - they may still qualify for partial land transfer tax rebates. These programs vary by province and municipality:
Under the Ontario Land Transfer Tax Rebate, Jessica could claim her portion (up to $4,000) of the provincial rebate on her share of the property, however, Mike wouldn't qualify for his portion
If Jessica and Mike’s new property is in Toronto, they would be on the hook for the Toronto Land Transfer Tax, however, similar to the provincial program, Jessica could claim her portion of the Toronto Land Transfer Tax rebate (up to $4,475)
First-Time Home Buyer Tax Credit
Jessica would be eligible to claim this $5,000 non-refundable tax credit on her tax return, providing up to $750 in tax relief. Mike wouldn't qualify since he's owned before.
Planning Their Purchase
Given their situation, Jessica and Mike decide to structure their purchase strategically:
- They maximize Jessica's RRSP contributions before buying to take full advantage of her HBP eligibility
- They consider putting a larger portion of the home in Jessica's name to maximize the land transfer tax rebate
- They plan to claim the First-Time Home Buyer Tax Credit through Jessica
At Deeded, we understand that navigating first-time homebuyer benefits can be complex, especially when previous property ownership is involved.
Our experienced real estate lawyers can help you understand exactly which programs you qualify for and how to maximize your benefits. We'll review your specific situation, including your ownership history and that of your spouse, to determine your eligibility for various federal, provincial, and municipal programs.
From land transfer tax rebates to the Home Buyers' Plan, we'll ensure you don't miss out on any financial advantages available to you. Our team can also help structure your property ownership strategically to optimize these benefits, while handling all the legal paperwork seamlessly through our digital platform. Contact us today to learn how we can make your home-buying journey smoother and more financially advantageous.
Frequently Asked Questions (FAQs):
Q: Could Mike use the HBP if they wait two more years to buy?
A: Yes, once Mike passes the four-year mark from his previous home sale, he would regain first-time buyer status for the HBP.
Q: Does it matter that Mike's previous property was a condo, not a house?
A: No, all types of residential properties count as home ownership, including condos, townhouses, and detached homes.
Q: Should they consider waiting to buy until Mike qualifies for all programs?
A: This depends on their specific circumstances, including current rental costs, market conditions, and financial goals. They should weigh the benefits of waiting against current market opportunities.
Q: Say Mike’s condo was actually in Florida (as opposed to Canada), does he qualify as a first time buyer?
A: The criteria for a first time home buyer according to the government is that Mike cannot have owned a property anywhere in the world in the past four years.
Looking to navigate first-time homebuyer benefits as a couple? Deeded's real estate lawyers can help you understand your eligibility and structure your purchase to maximize available programs. We'll ensure you don't miss out on any benefits you qualify for while making the process smooth and stress-free.
Remember, while having one spouse who previously owned property may limit some benefits, careful planning can help you maximize the advantages still available to you. Understanding these nuances early in your home-buying journey can help you make informed decisions about timing and property ownership structure.
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