If you’re navigating the real estate market for the first time, you may be wondering what exactly qualifies you as a “first time homebuyer.” At its core, a first time homebuyer meaning is someone who has never owned a home before, either in Canada or anywhere else in the world. This definition seems straightforward, but it plays a pivotal role in various aspects of the home buying process, especially in Ontario and Toronto.  First Time homebuyer meaning is different for different purposes, so depending on whether you are hoping to get a Land Transfer Tax rebate, or use your RRSP the definition could be different.

In Ontario, being a first time homebuyer comes with a perk in the form of a land transfer tax rebate. This can amount to a significant saving. For those buying in Toronto, there’s an additional cherry on top: the city offers its own rebate. These rebates are exclusive to first time homebuyers and are designed to ease the financial burden of entering the housing market.

Try our land transfer tax calculator here.

The Home Buyers’ Plan (HBP) is a significant benefit for first time homebuyers, allowing the withdrawal of up to $35,000 from your RRSP to purchase or construct a qualifying home. However, the first time homebuyer meaning for the HBP includes not having lived in a home that you or your spouse/common-law partner owned during the current year before the withdrawal and the previous four years. For example, if planning a withdrawal on July 31, 2024, you shouldn’t have lived in a home you owned from January 1, 2020, to June 30, 2024.

Disclaimer for Previous HBP Participants:

If you’ve previously participated in the HBP, you may be eligible to do so again if your HBP balance is zero on January 1st of the year you plan to withdraw, and you meet all other eligibility criteria. This provision allows for a second chance to benefit from the HBP for those who have repaid their previous HBP withdrawal and are re-entering the housing market.

Remember, any funds withdrawn under the HBP must be repaid within a 15-year period to avoid tax consequences.

It’s important to note that being a first time homebuyer doesn’t affect the minimum down payment requirements – these are uniform for all buyers. Whether it’s your first or fifth home, the minimum down payment typically starts at 5% of the home’s purchase price. This requirement ensures a level playing field, maintaining fairness in the market.

As a first time homebuyer, you’re stepping into a world of new experiences and opportunities. While the journey can seem daunting, understanding your status and the unique advantages it brings can significantly ease the process. Remember, whether it’s understanding your tax rebates or leveraging your RRSP, knowledge is your greatest asset in making informed decisions.

Happy house hunting!