It’s a question that challenges conventional thinking on history, physics and logic: How can you do something and then, somehow, do it again later for the first time? You can if that “first time” involves buying a home.

People who use government programs for first-time home buyers probably won’t need them more than once in their lifetime. However, under certain circumstances, it is possible to qualify as a first-time home buyer again. This includes people who have separated from, and are no longer living with, their spouse or partner. It also includes people who purchased their first home a long time ago and would like to make use of government programs a second time. 

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Can you qualify as a first-time home buyer twice? 

“Truly it depends on the program you are asking about,” says Denise Laframboise, a mortgage broker with LaframboiseMortgage.ca in Brooklin, Ont., about initiatives like the Home Buyers’ Plan, the First-Time Home Buyer Incentive and land transfer tax credits. “Each program will have its own criteria for [qualifying as a] ‘first-time home buyer.’ It isn’t a one-size-fits-all across every program and every provincial or municipal incentive.”

Read more on these programs, including how they define “first-time home buyers” and whether you can access their benefits more than once or for purchasing a second home.

The Home Buyers’ Plan

The Home Buyers’ Plan (HBP) is a federal program that allows first-time home buyers to withdraw up to $35,000 out of their registered retirement savings plan (RRSP) for the purpose of buying or building a home. Couples buying a place together can access up to a total of $70,000 from their RRSPs. The HBP works like a self-loan, in that borrowers must repay their RRSP gradually within 15 years. If they don’t, a portion of the funds withdrawn is taxed as income each year. 

The HBP defines a first-time home buyer as someone who has not owned a home, nor occupied a home that their current spouse or common-law partner owned, within the last four years. That last part is what opens the doors of the HBP to second-time home buyers. As long as your home purchase falls outside the four-year window, you can use money from your RRSP to buy a second house without the tax implications of withdrawing. 

Note that the eligibility window is longer than it seems. It begins on Jan. 1 of the fourth year prior to the withdrawal from your RRSP. So, let’s say you intend to pull money from your account on Nov. 15, 2022. In order to do so, you must not have owned a home since at least Jan. 1, 2018—that’s nearly five years. 

You might be wondering about couples who have separated and are no longer living together. Previously, there were no exceptions to the four-year rule mentioned above. But under new rules introduced in 2019, a person can qualify as a first-time buyer again under the following conditions: 

You have been living separate and apart from your spouse or common-law partner for at least 90 days. You are not living in a home owned by a new partner or spouse at the time of withdrawing funds. 

That’s not all. To use the program a second time, you must have fully repaid your previous HBP balance before Jan. 1 of the year of your next RRSP withdrawal. Depending on how much you took out, it may be tricky to repay the full amount on time.

The First-Time Home Buyer Incentive 

The First-Time Home Buyer Incentive (FTHBI) is a federal program that offers eligible buyers 5% or 10% of the property’s purchase price, to be applied towards their down payment. In exchange for this interest-free loan, the federal government shares in the appreciation or depreciation in the home’s value, up to certain limits.

The FTHBI takes a similar stance as the HBP on the definition of a first-time home buyer. After a long enough stretch, or under certain circumstances, it’s possible to hit reset on your status as a first-time buyer. According to this federal program, you are a first-time buyer if you meet one of the following criteria: 

You have never purchased a home before.You haven’t occupied a home that your current spouse or common-law partner owned within the last four years. (The four-year period is calculated the same way as described above for the HBP.) 

The FTHBI also follows similar rules as the HBP when it comes to couples who are separated. In addition to the above criteria, you’re considered a first-time home buyer if you have “recently experienced the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements).” 

That makes the program more accessible for those looking to buy again. However, you’ll still have to meet all the other eligibility requirements, and there are many. In fact, the federal Liberal government is currently looking at ways to make the program more flexible.  

Land transfer tax rebates

You can’t escape taxes. No matter where you’re buying a home in Canada, you’re going to pay land transfer taxes. It’s a hefty expense of several thousand dollars, and it can easily be overlooked. Fortunately, the governments of Toronto, Ontario, British Columbia, and Prince Edward Island offer land transfer tax rebates to first-time home buyers. 

But, unfortunately for those buying a second home, these programs are the most restrictive of the bunch. If you’ve bought a house before, or you lived in a home that belonged to your spouse or common-law partner, you’re no longer eligible for these tax rebates. 

In fact, every jurisdiction specifies that you cannot have previously owned a home, or even had a share of a home, anywhere in the world. And in Ontario, it doesn’t even matter if you didn’t buy the home yourself. Inheriting or being given a home still counts as having been a first-time home buyer. 

The benefits of being a first-time home buyer—again

For some Canadians, home ownership seems like a difficult goal to achieve, so Laframboise suggests considering all your options. 

“If there’s a program that can assist you in purchasing a home federally, provincially or municipally, it is worth exploring,” advises Laframboise. “Some [of my] clients are able to purchase homes in a higher price range or sooner than they thought possible through first-time buyer initiatives, so it really can be a valuable tool in your home ownership journey.”

The same approach can apply to buying a home a second time, as long as you meet the eligibility requirements. However, for repeat buyers, Laframboise adds that it’s good to have a conversation with a mortgage broker or financial advisor who can determine the pros and cons related to your specific situation. 

Laframboise points to a few recent clients who have been able to take advantage of first-time home buying programs for the second time. When divorcing or separating, a person’s household income may be divided in two, but life’s expenses (including paying for a home) often remain the same. In these cases, first-time home buyer programs can help people re-enter the real estate market sooner than if they didn’t use them. 

However, it’s something that may not be possible, or even the best decision, for everyone, Laframboise adds. With markets in a downfall as of late, not everyone should or is able to withdraw from an RRSP through the HBP, for example. 

Final thoughts

As strange as it may seem, it is possible to be a “first-timer” more than once—at least as far as Canada’s home buying programs are concerned. The HBP and the First-Time Home Buyer Incentive are lenient in applying their definitions of a first-time buyer, and that’s a little-known fact that could potentially benefit you.

A version of this article was first published in September 2016. It was updated on Aug. 8, 2022.

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