Can I Use First-Time Home Buyer Programs Twice in Canada?

To participate in Canada’s first-time home buyer initiatives, it’s not necessary for you to actually be buying your first home. The conditions attached to programs such as the First Home Savings Account (FHSA) and the Home Buyers’ Plan (HBP) leave room for you to be a first-time home buyer twice — or more.

In many cases, all you need to do to be considered a first-timer again is to spread out your periods of home ownership by a certain number of years.

First-time home buyer programs you can use twice

By stretching the meaning of “first-time home buyer” to include people who may have owned a house in the past, federal assistance programs become accessible to more people.

Buying a home, selling it and waiting four or five years to buy your next one may not be the most common scenario, but if that’s the position you one day find yourself in, these programs may offer help you can tap into.

First Home Savings Account

Launched on April 1, 2023, the FHSA is a registered savings account that can help home buyers accelerate their down payment savings. You can contribute up to $8,000 per year to a maximum of $40,000. Your contributions are tax-deductible, and whatever gains you realize on your FHSA investments are tax-free.

Because it’s an account and not a program, the FHSA has different definitions of “first-time home buyer” that apply to opening an account and making withdrawals:

For opening an account: You’re considered a first-time home buyer if you or your spouse or common law partner didn’t own a qualifying home and use it as your principal residence in the calendar year before the account is opened, or at any time in the preceding four calendar years.

For making withdrawals: To make a withdrawal that doesn’t lead to any penalties, you’ll be considered a first-time home buyer if you didn’t live in a qualifying home as your principal residence in the calendar year before your withdrawal — with the exception of the 30 days before making the withdrawal — or at any time during the previous four years.

Dipping back into the FHSA well is possible, but might be a little unrealistic. To use the FHSA twice, you’d have to sell your home, rent or secure other accommodations for four years and then spend up to another half-decade saving $40,000 for your next purchase.

Home Buyers’ Plan

The HBP allows you to borrow up to $35,000 from your registered retirement savings plan (RRSP) to put toward the purchase of a first home. You’ll pay no early withdrawal penalties so long as the funds are paid back to your RRSP in 15 years.

You’ll be considered a first-time home buyer for the HBP if you did not occupy a home that you or your current spouse/common-law partner owned in the four-year period before you withdraw your RRSP funds.

But that “four-year period” may not even total four years. It begins on January 1 of the fourth year before your withdrawal, and ends 31 days before the date you make your withdrawal. If you made an HBP withdrawal on June 20, 2023, for example, your four-year period would start on January 1, 2019 and end on May 21, 2023.

If you didn’t own your principal residence during that period, which is less than three and a half years, you’d be eligible to use the HBP again.

You can also get around the typical first-time home buyer eligibility aspect of the HBP if your relationship with a spouse or common-law partner ended and you’ve been living separately from them for at least 90 days. Withdrawals will be allowed if you began to live apart either in the year your withdrawal is made or in the four years prior.

If you want to make another HBP-related withdrawal, your RRSP must be repaid in full at the beginning of the year.

What about provincial first-time home buyer programs?

The federal assistance programs discussed here use broad definitions of “first-time home buyer.” Provincial homebuying initiatives aren’t quite as flexible; if you’ve owned a home at any point in the past, you may not be eligible for them.

For example, you’re only a first-time home buyer in Ontario if you’ve never owned a home, in whole or in part, anywhere in the world. That includes property you’ve inherited or received as a gift.

To be a first-time home buyer in British Columbia, you cannot have owned even a portion of your principal residence — anywhere in the world at any time. You also won’t be considered a first-timer if you’ve ever received an exemption or refund intended for first-time home buyers.

You’re a first-time home buyer in Alberta only if you’ve never owned or had an interest in any property — regardless of location.

You can use the Home Buyers’ Plan more than once if you did not own your principal residence for four years prior to making a withdrawal from your RRSP. That four-year period may be shorter if you go through a divorce and don’t keep your home. Before making a second withdrawal, you’ll have to ensure your first one was paid back in full.

You can use the First-Home Savings Account more than once. Before you can use it a second time, you’ll have to go through a four-year period where you or your spouse/common-law partner don’t own your principal residence.