Boasting excellent quality of life, a booming jobs industry and some of the last affordable housing bubbles left in the country, Alberta is one of the most attractive places to move in Canada right now.
While the challenges of buying a home in Alberta aren’t as severe as more expensive provinces such as Ontario and British Columbia, first-time homebuyers can expect stiff competition and rapidly rising prices during their search. Thankfully, there are some ways to make buying a house in Alberta easier.
Here are some programs and incentives that can help.
First Place Home Ownership Program Edmonton
The First Place Program partners with banks and builders to develop surplus school sites into townhouses for first-time homebuyers. First Place homes are typically sold at market price, but with a five-year deferral on the land portion of the mortgage, making them a little more accessible for first-time buyers.
Without the land portion of the mortgage, homeowners only pay for the cost of the unit, condo fees, taxes, and utility costs.
To qualify, potential buyers need a net worth of $25,000 or less and a household income under $130,000. Homeowners will also need to reside in the unit for at least the first five years of ownership.
Attainable Homes Calgary
Attainable Homes Calgary (AHC) provides down payment assistance to qualifying first-time homebuyers. If the homebuyer can provide $2,000 up front, AHC can issue a loan for the remaining amount of a 5 per cent down payment.
In order to be eligible, annual household earnings must be no more than $131,424, and the applicant must be purchasing a property offered through the AHC program.
It’s important to note that this program is a shared equity arrangement, meaning the homeowner will pay AHC a portion of their home’s equity appreciation along with the initially borrowed amount.
The amount of equity a homeowner will need to pay AHC varies by how long the home is owned. Generally, if the applicant owns their home for five or more years, 25 per cent of any appreciation goes to AHC.
First Place and AHC might not fit every first-time homebuyer’s needs. If this is the case, federal programs can also help ease some of the homebuying stress.
The Home Buyer’s Plan
The Home Buyers’ Plan (HBP) is a federal program that allows first-time homebuyers to withdraw up to $60,000 tax-free from their registered retirement savings plans (RRSPs) to put towards a down payment on a primary residence.
Couples purchasing a home together would be able to cumulatively withdraw up to $120,000 from their RRSPs.
It is important to note that funds withdrawn under the HBP must be repaid to the RRSP within a 15-year period, with at least 1/15th of the withdrawal amount paid back into the account each year.
First Home Savings Account
A First Home Savings Account (FHSA) is a registered savings account which functions similarly to RRSPs and tax-free savings accounts (TFSAs). Deposits are tax-deductible, and any investment returns in that account are tax-free.
Deposits into an FHSA are capped at $8,000 per year, with a lifetime limit of $40,000.
GST/HST New Housing Rebate
The GST/HST New Housing Rebate allows purchasers and homeowners to recover some of the GST or the federal portion of the HST paid for a newly constructed or substantially renovated primary residence.
Different rules apply depending on the property type and location, so it’s important to check eligibility criteria before applying.
Ready to start searching for a new home in Alberta? Check out some of Livabl’s listings here.
