Canada’s housing price is likely to decrease by 4.8 percent, as predicted by CREA. The Canadian Real Estate Association implied that the average housing price in Canada would reduce by 4.8 percent by the end of 2023. The reduced housing price contrasts with the price in the latter part of 2022.
According to CREA’s predictions, Canadian housing will become more feasible for not just Canadians but also for newcomers coming here.
Canada’s housing price and other details as a Permanent Resident or newcomer
Newcomers arriving in Canada will be able to save up for their first house due to a recent initiative by Canada. This is the First Home Savings Account, which is also tax-free.
This year, as of April 1, financial institutions in Canada will now be able to provide a different kind of savings account to those with Canadian citizenship and Permanent Residency.
To gain eligibility for FHSA, the concerned person must hold Canadian citizenship and be above 17 years old, and should seek to buy their first house in Canada.
FHSA account holders will require to maintain their account until one of the following requirements is met:
- 15 years must have elapsed since the account opened.
- Toward the end of the year, when they become 71 years old.
- Until they make “a valid withdrawal from the FHSA” towards purchasing their first house at the close of the year after that.
FHSA is Canada’s most recent initiative to increase house feasibility. This also implies that Canadian home buyers will be able to save $40,000 in the form of tax-free savings. Further, it is approximately $8,000 each year for five years. As a result, Canada’s government seeks to help Canadians to save for a home down payment.
According to the Canadian government, the FHSA will offer $725 million to assist people in the upcoming five years.
The contributions of the FHSA will carry tax deductions and non-taxable first-home purchase withdrawals.
Canada’s housing price and Other home buying advantages for Canadians
First-time home buyer incentive
The FTHBI provides first-home buyers with around 5 to 10 percent price to gain eligibility as Canadians to use on down payment homes. This incentive lowers “mortgage carrying costs” by increasing a down payment, making house ownership more affordable.
The expenditures associated with sustaining a residence (in this case, mortgage payments) are mortgage-carrying costs. Moreover, this incentive is open to all Canadian citizens, permanent residents, and temporary foreign workers.
Home Buyer’s Plan
First-time homebuyers can withdraw up to $35,000 in tax-free funds (per person) from their RRSP to spend toward their first house if they are purchasing or developing an eligible home in Canada. Additionally, the HBP has a 15-year payback window.
The purchased property must be used as the principal residence for at least the first year to qualify for the HBP, and any contributions made to an RRSP must remain in the account for a minimum of 90 days.
Provincial Grants and Incentives
Most Canadian provinces or territories own separate grants and incentives for those buying a home for the first time.
Therefore, there are primarily three programs-
- British Columbia’s FTHB program– This program in British Columbia aims to help first-time home buyers in British Columbia by lowering or eliminating the property transfer taxes they must pay. For qualified buyers, this tax may be completely or partially excluded.
- Ontario’s Land Transfer Tax Refunds– A full or partial refund of the land transfer tax may be available to eligible first-time homeowners in Ontario who purchase land or have an interest in it. All Ontario houses, including newly built homes and those that have been resold, are now eligible for refunds.
- Nova Scotia’s FTHB program– First-time home buyers receive an 18.75 percent rebate for their new homes. The equivalent rebate is HSTs provincial portion, and 1.31 percent of the capital stock’s purchasing cost up to $3,000 in a housing co-operative.
