This surprises a lot of people.
Many buyers assume that once they’ve owned a home, they’re permanently excluded from any first-time home buyer options. In reality, that’s not always the case. Depending on your situation, you may be able to hit the “reset” button and qualify as a first-time home buyer again.
Who Can Qualify as a First-Time Home Buyer Again?
Government programs and lenders often use a broader definition than many people expect. You may be considered a first-time home buyer if any of the following apply:
- The “Four-Year Reset”: You haven’t owned and lived in a home that you (or your current spouse or common-law partner) owned in the last four years. This is a rolling window, meaning if you sold your home years ago and have been renting since, you may qualify again.
- The Rental Distinction: You own an investment property, but you have been renting the home you actually live in. If you haven’t lived in a home you owned as a primary residence within that four-year window, you are often still considered a first-time buyer.
- Relationship Breakdown: You’ve experienced a marriage or relationship breakdown and have lived separate and apart from your spouse or partner for at least 90 days.
- You’ve never owned a home before: The classic definition still applies.
What This Can Mean for You
If you qualify again, it can open the door to financial tools that make getting back into the market far more manageable:
- First Home Savings Account (FHSA): You can contribute up to $8,000 per year (to a $40,000 lifetime maximum). Contributions are tax-deductible like an RRSP, and qualifying withdrawals are tax-free like a TFSA.
- Home Buyers’ Plan (HBP): Eligible buyers can withdraw up to $60,000 from their RRSPs to use toward a down payment, provided the applicable residency rules are met.
- Lower Down Payments: You may be eligible to purchase with as little as 5% down (subject to lender qualification), which can be especially helpful if equity from a previous home was tied up in a settlement or transition.
- 30-Year Amortization: For qualifying first-time buyers purchasing new builds, longer amortization options may be available to help reduce monthly payments.
Why the Details Matter
While these programs can be incredibly helpful, the details matter. Eligibility can hinge on your income, credit profile, and most importantly, the specific dates of when you last lived in a home you owned.
Two people in very similar situations in Red Deer can have completely different outcomes based on whether they lived in their previous property or simply held it as a rental. This is why relying on general online searches can be misleading.
Final Thoughts
If you’re considering buying again and assume you were “disqualified” because of your past, it may be time for a second look. Sometimes the biggest barrier isn’t affordability, it’s outdated information.
Whether you’re considering a character home in Woodlea or a new build in Sylvan Lake, I’m here to help you navigate the details. If you’re unsure whether you qualify to “reset” your first-time buyer status, feel free to reach out. I’m always happy to help you understand your next step.
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Written by Amanda Blake
Top Listing Sales Agent |Owner & Broker
Lime Green Realty® Central
Serving Red Deer & Central Alberta
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