If you are thinking about becoming a homeowner in Quebec, you should know that you can secure a subsidy for purchasing your first condo at the provincial level and/or through the federal government.
Condo Stratégis, a specialist in condo syndicate management, presents the main types of purchase subsidies for first-time condo buyers.
What are the subsidies for purchasing your first condo?
First-time home buyers can take advantage of several assistance programs for their condo project. Although the cost of the certificate of location is the responsibility of the seller, this helping hand will allow you to cover other expenses and save thousands of dollars.
The reimbursement of the welcome tax
Among the municipal taxes in Montreal, and across Quebec more broadly, there is one that is due upon the transfer of ownership of a property: the welcome tax or “property transfer tax.”
The buyer of a condo or a new house can have this tax reimbursed. To be eligible for this, the property must constitute the applicant’s first real estate purchase and be the buyer’s primary residence. Once the tax has been paid, the exemption process can be initiated.
This subsidy for purchasing your first condo lets you save thousands of dollars. For example, for a purchase valued at $350,000, you can save $3,653:
- $266 on the first portion,
- $2,130 on the second,
- and $1,257 on the third.
Tax credits for first-time home buyers
In Quebec, first-time home buyers who are purchasing their primary residence receive a provincial tax credit (as well as a federal tax credit) on the taxable income in the amount of $750. You can apply for this tax reduction from the year of acquisition.
The Minister of Finance, Eric Girard, announced in June 2022 that this first-time buyer subsidy would double in January 2023.
Using an RRSP to purchase your first property
$35,000 interest-free for a single buyer, $70,000 for a couple.
The HBP (Home Buyers’ Plan) allows first-time home buyers to use up to $35,000 of their RRSP (registered retirement savings plan) contributions as a down payment deducted from the purchase price, or $70,000 for a couple.
No interest and a long-term repayment
The major advantage of using this money to purchase a first property is that it is:
- interest-free;
- repayable in annual installments over a maximum period of 15 years.
Assistance for all real estate purchases
Here are the forms of assistance for all purchase projects.
Partial reimbursement of the GST/QST
If you are buying a condo to renovate, you may be entitled to financial assistance in the form of a partial reimbursement of the GST and the QST, provided that:
- you are carrying out major renovations or having them carried out;
- you will be the first to live there after the construction work.
The maximum reimbursement may reach up to:
- 36% of the GST paid;
- 50% of the QST paid.
Other assistance for buying a property
There are also other forms of assistance for buying a property besides the subsidy for purchasing a first condo—whether you are a first-time buyer or not—including:
- the deduction of moving expenses to keep/start a new position;
- assistance in the context of the Rénoclimat program (e.g., to replace a heating system, water heater, or ventilation system);
- a subsidy in the context of the Chauffez vert program (e.g., to replace an old heating system with a pellet stove).
At Condo Stratégis, we do much more than take care of the financial management of your condominium. Don’t hesitate to ask us for advice if you are thinking about buying a condo, whether it’s a first-time purchase or not.