Becoming a first-time homebuyer is an exciting milestone, and many people assume that it’s a one-time opportunity. However, did you know that it’s possible to be a first-time homebuyer twice? In certain situations, you may qualify for first-time homebuyer benefits even if you’ve owned a home in the past. This article will explain how it’s possible to qualify again as a first-time homebuyer, the requirements, and the benefits you can access.
Table of Contents
- Introduction
- What Qualifies You as a First-Time Homebuyer?
- How You Can Be a First-Time Homebuyer Twice
- Benefits for First-Time Homebuyers
- Eligibility Criteria for Re-Qualifying as a First-Time Homebuyer
- Special Circumstances for First-Time Homebuyer Status
- Conclusion
1. Introduction
Becoming a first-time homebuyer comes with many advantages, including tax credits, down payment assistance programs, and more. But what if you’ve already owned a home? Can you still take advantage of these benefits? In Canada, you can be considered a first-time homebuyer twice under specific conditions, allowing you to reap the same benefits a second time.
This article will dive into how it works and what you need to know if you’re looking to buy a home again after having previously owned one.
2. What Qualifies You as a First-Time Homebuyer?
In Canada, the Canada Mortgage and Housing Corporation (CMHC) and other lenders define a first-time homebuyer as someone who has never owned a home. However, there are nuances to this definition. To be officially recognized as a first-time homebuyer, you must meet the following general criteria:
- Not owned a home in the past 4 years: The most common rule is that you must not have owned a home in the past 4 years.
- New to the housing market: You must be a Canadian citizen or permanent resident who hasn’t previously had a registered interest in a home.
3. How You Can Be a First-Time Homebuyer Twice
It’s possible to qualify as a first-time homebuyer twice if you meet certain conditions. The most common way this happens is if you sell a home due to a life change, such as:
- Divorce or Separation: If you were previously married or in a common-law relationship, you may be able to qualify for first-time homebuyer status again if you no longer own a home. This is especially true if the family home was sold as part of the separation process.
- Significant Life Changes: Certain circumstances, such as moving to a different province or city for work or lifestyle reasons, might also reset the clock on your homeownership status. In these cases, if you’ve been out of the housing market for at least four years, you may qualify for first-time homebuyer benefits again.
- Inherited Property: If you inherit a home and don’t live in it as your primary residence, you may still qualify for first-time homebuyer benefits when purchasing a home for yourself.
4. Benefits for First-Time Homebuyers
As a first-time homebuyer, you can take advantage of several financial benefits designed to help make homeownership more affordable:
a. First-Time Home Buyer Incentive (FTHBI)
This government program helps with the purchase price by providing a shared equity mortgage. It allows you to borrow 5% or 10% of the home’s purchase price to reduce your monthly mortgage payments.
b. Home Buyers’ Plan (HBP)
Through the Home Buyers’ Plan, you can withdraw up to $35,000 from your RRSP to put towards the purchase of a new home. This can be especially helpful for your down payment.
c. GST/HST New Housing Rebate
If you’re buying a new home, the GST/HST New Housing Rebate allows you to recover some of the GST or HST paid on the new home, making it more affordable.
d. Land Transfer Tax Rebates
In some provinces, first-time homebuyers can receive rebates on the land transfer tax, which can save you thousands of dollars on your home purchase.
5. Eligibility Criteria for Re-Qualifying as a First-Time Homebuyer
To re-qualify for first-time homebuyer benefits, you must meet certain conditions:
| Criteria | Requirement |
|---|---|
| Previous Home Ownership | Must not have owned a home in the last 4 years |
| Living Situation | Must not have a registered interest in a property at the time of purchase |
| Income and Down Payment | Must meet income and down payment requirements for first-time buyers |
| Intention to Occupy | Must plan to live in the new property as your primary residence |
If you meet these conditions after a life event, such as a divorce or a lengthy period of renting, you may be able to claim first-time homebuyer status again.
6. Special Circumstances for First-Time Homebuyer Status
There are some additional special circumstances where you may qualify for first-time homebuyer status:
- Disability: If you or your spouse have a disability and are buying a home that accommodates your needs, some programs allow for first-time homebuyer benefits to apply, even if you’ve owned a home before.
- Relocation for Work: If you’re moving to a new city or province for work and have not owned a home in the last four years, you may be eligible for first-time homebuyer benefits, especially if your previous homeownership was due to work relocation.
- Inheriting a Home: If you inherit a home but it is not used as your primary residence, you may still be eligible to qualify as a first-time homebuyer.
7. Conclusion
While it may seem unusual, you can be a first-time homebuyer twice under specific circumstances. If you’ve previously owned a home but experienced a significant life change, such as a divorce or long-term renting, you may still be eligible for first-time homebuyer benefits when purchasing a new property. These benefits can include financial incentives, tax rebates, and programs designed to make homeownership more affordable.
If you’re considering re-entering the housing market and think you might qualify as a first-time homebuyer again, it’s a good idea to speak with a real estate professional or mortgage broker to help guide you through the process and make sure you’re taking advantage of all the opportunities available.
