First-Time Home Buyers Incentives in Newfoundland and Labrador
Table of contents
First-time home buyers in Newfoundland and Labrador have several federal and provincial incentives available to help with homeownership costs. These programs are designed to help ease the financial burden of purchasing a home as a first-time buyer through various grants, repayable loans, tax credits, and rebates.
Key Takeaways
- Provincial assistance requires first-time buyers to be residents of the province and meet other eligibility requirements.
- The First-Time Homebuyers Program (FHP) assists residents of the province through a grant and a repayable loan to purchase a home.
- Federal programs like the Home Buyer’s Plan (HBP) and the Home Buyers’ Amount can help further reduce costs for first-time buyers.
Newfoundland and Labrador First-Time Home Buyer Incentives
First-time home buyer incentives in Newfoundland and Labrador are designed to assist households in purchasing their first home. The First-Time Homebuyers Program (FHP) assists with a grant to help cover closing costs and a repayable loan to help cover the down payment on a new or existing home.
First-Time Homebuyers Program (FHP)
The First-Time Homebuyers Program assists first-time buyers from any region of the province who meet the requirements and have been pre-approved for a mortgage by a recognized financial institution. The program provides a grant of 50% to a maximum of $1,500 toward legal closing costs and a repayable loan of up to 5% of the purchase price of a new or existing home.
The loan amount is based on a sliding scale, considering the home’s purchase price and household income. Household income must be less than $85,000 to qualify for the full loan amount or a maximum of $95,000 for sliding scale assistance, which reduces the loan amount by $500 for each additional $1,000 in income over $85,000. The loan has a grace period where it does not need to be paid back for the first 5 years after purchase.
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Federal First-Time Home Buyer Programs
In addition to the provincial incentive available to first-time home buyers in the province, several federal programs can help reduce homeownership costs.
RRSP Home Buyers’ Plan
The RRSP Home Buyers’ Plan (HBP) allows first-time buyers to access up to $60,000 ($120,000 for couples) tax-free to purchase a home. The withdrawal acts like a loan with a 2-year grace period where no repayments are required. The amount must be repaid in equal installments over 15 years to remain tax-free once the grace period ends.
Home Buyers’ Amount
The home buyers’ amount allows first-time buyers to claim up to $10,000 at tax time for a tax credit of up to $1,500. The amount can be split between eligible spouses, common-law partners, or any other eligible person jointly acquiring the home.
GST/HST New Housing Rebate
When purchasing a newly built or substantially renovated home, the GST/HST New Housing Rebate provides a rebate on the Goods and Services Tax (GST) or Harmonized Sales Tax (HST). The rebate amount will depend on the province where the property is located and whether the rebate is available for the provincial portion of taxes as well as the federal portion.
Frequently Asked Questions (FAQ) on First-Time Home Buyers Incentives in Newfoundland and Labrador
What down payment do I need as a first-time home buyer?
The down payment you require depends on the purchase price of the home. First-time home buyers should expect to put down a minimum of 5% of the purchase price for homes valued at $500,000 or less. For homes between $500,000 and $1,499,999, the required down payment is 5% on the first $500,000 and 10% on the remaining amount. Homes priced at $1.5 million or more require a 20% down payment.
What maximum grant amount is available through the Newfoundland and Labrador First-Time Homebuyers Program (FHP)?
The FHP provides up to $1,500 as a grant to cover closing costs when purchasing your first home. In addition to the grant, first-time buyers can receive a repayable loan for up to $17,500, depending on household income and the home’s purchase price.
Do I need to be a resident of Newfoundland to qualify for first-time home buyer programs in the province?
The FHP requires first-time home buyers to reside in any region of the province to qualify for assistance. Federal programs available to first-time buyers require that you are a citizen or resident of Canada as outlined in their qualifying criteria.
Final Thoughts
Understanding the available provincial and federal incentives can help significantly ease the financial burden of purchasing your first home. These programs are designed to help make homeownership more accessible for residents by providing down payment and closing cost assistance, freeing up funds for other household expenses.
Contact nesto mortgage experts today to explore your mortgage options and secure the best rate for your first home purchase in Newfoundland and Labrador.
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