Recently a survey was conducted by the Canadian Real Estate Association (CREA) which indicated that the average home prices are subjected to drop by 4.8% by the end of 2023.
This decrease in the price is compared to the average price of a property in 2022. According to CREA projections, it will be a lot more affordable for all Canadians as well as new immigrants to buy a house in Canada.
A Brief on Buying a House in Canada as a Newcomer
This new reform made by the Canadian government will make it easier for newcomers to save up and buy their first home in Canada through the new tax-free First Home Savings Account (FHSA).
With effect from April 1, Canadian financial institutions will be offering a new kind of savings account to qualifying Canadian citizens and permanent residents.
To stand eligible for an FHSA, the account holder is required to be a Canadian resident above the age of 17 years who is looking to purchase their first home. FSHA holders are also required to keep the account open until the following eligibility is met:
- 15 years have passed since opening the account
- Until the end of the year when they turn 71
- Until the end of the year following the year when they make “a qualifying withdrawal [from the] FHSA” for the purchase of their first home
The federal government of Canada has initiated FHSA to increase the affordability of housing in Canada. This empowers first-time house buyers an ability to collect $40,000 in tax-free savings, the government is anticipating that this move will help Canadians to save for a down payment on the home. Also, the government projects that the FHSA will offer $725 million in support over the coming five years.
Benefits of First-Time Home-Buying in Canada
First-Time Home Buyer Incentive
The First-Time Home Buyer Incentive provides five or ten percent of a home’s purchase price to eligible Canadians for use on a down payment. By adding this to the down payment, this incentive makes house buying in Canada more affordable. All foreign workers, temporary or permanent residents, and Canadian citizens are eligible for this incentive.
Home Buyers’ Plan
People who wish to buy or purchase a qualifying home for the first time in Canada have the option to withdraw up to $35,000 per person from their RRSP without any tax obligations. This amount can be used to finance their initial home purchase.
Also, the HBP program offers a 15-year timeline for repayment. To qualify for the program, the property must be utilized as the primary residence for at least one year, and any deposits made to the RRSP account must remain there for a minimum of 90 days.
Provincial Grants & Incentives
First-time home buyers in Canada can benefit from a range of provincial grants and incentives, which vary from one province or territory to another. These programs are designed to provide support and financial assistance to individuals who are purchasing a home for the first time.