The Top 5 Money-Saving Tips Every First-Time Homebuyer Needs to Know

Buying your first home is one of life’s most exciting milestones, but it can also be a bit daunting, especially when it comes to the financial side. With a little know-how, you can take advantage of several programs and strategies to make your journey into homeownership a whole lot more affordable. Here are the top 5 things you need to know to save big as a first-time homebuyer in Canada. Let’s make sure you keep more of your hard-earned cash while turning your dream home into a reality!

1. Take Advantage of the First-Time Home Buyers' Tax Credit

First things first—you'll want to take full advantage of the First-Time Home Buyers' Tax Credit. As a first-time homebuyer, you’re eligible for a tax credit that gives you a $1,500 break. It’s designed to help cover some of those initial costs, such as legal fees, inspections, or closing expenses. When tax season rolls around, you’ll be glad you knew about this one!

2. Maximize Your Savings with the FHSA and TFSA

Saving up for a down payment can be a challenge, but with the right accounts, you can supercharge your savings. The First Home Savings Account (FHSA) and the Tax-Free Savings Account (TFSA) are two powerful tools to help you get there faster.

• FHSA: You can contribute up to $8,000 a year with a lifetime maximum of $40,000. The best part? Contributions are tax-deductible, and when you withdraw the funds for your first home purchase, it's tax-free.

• TFSA: Use this account to grow your investments tax-free, allowing you to save even more for your home. You can withdraw funds at any time without penalties, making it perfect for flexible saving.

Combining these two accounts gives you a smart strategy to build your down payment efficiently and tax-effectively.

3. Tap into Your RRSP with the Home Buyers' Plan

If you’ve been saving in a Registered Retirement Savings Plan (RRSP), you can withdraw up to $60,000 tax-free to help with your down payment, thanks to the Home Buyers' Plan. You have a 5-year grace period before you need to start repaying the withdrawn amount and you have 15 years to fully repay the amount to your RRSP. That gives you ample time to settle into your new home and manage your finances. Using your RRSP for your down payment could be the extra boost you need to secure your first property. (Edited January 2025)

4. Claim the GST/HST New Housing Rebate for Extra Savings

If you’re purchasing a newly built home or planning major renovations, you may be eligible for the GST/HST New Housing Rebate, which returns a portion of the taxes paid on the property. This rebate can save you thousands of dollars, making it especially valuable for those buying newly constructed homes or undertaking substantial renovations. Keep this in mind if you’re considering a new build or fixer-upper—every bit counts!

5. Don't Forget the Ontario Land Transfer Tax Rebate

Here’s a benefit that’s specific to Ontario but too good to miss: first-time homebuyers can receive up to $4,000 back on the Land Transfer Tax. This rebate can significantly reduce your upfront costs and free up some funds for other essentials, like furniture or moving expenses. Don’t forget to apply for this rebate to keep more money in your pocket.

Bonus Tip: Work with an Experienced Real Estate Agent

Buying a home is one of the most significant decisions you'll make, and having an experienced real estate agent on your side is crucial. An agent brings knowledge, resources, and expertise to help you navigate the market, find the right property, and negotiate the best deal. Most importantly, they’ll guide you step-by-step through the entire process, ensuring you make informed decisions with confidence. Working with a skilled agent can be the difference between a smooth, successful home-buying experience and a stressful one.

Final Thoughts

Navigating the world of home buying for the first time can be challenging, but these tips will help you save and make the process smoother. By taking advantage of tax credits, smart savings accounts, and rebates—and working with a trusted real estate professional—you can make your transition into homeownership more affordable and less stressful.

If you have questions about any of these programs or would like personalized advice on how to make the most of your first home purchase, feel free to reach out. We’re here to guide you every step of the way.

Happy house hunting!