What is the taxable benefit if my employer gives me a below-market-rate loan to buy a home?

A below-market-rate loan from your employer to help you buy a home is generally treated as creating a taxable benefit, calculated by comparing the interest rate you're actually paying against a benchmark rate CRA prescribes for this purpose. If the rate you're paying is below that benchmark, the difference is generally added to your income as a taxable benefit, even though the loan itself is a helpful perk that can make home ownership more accessible.

This works the same way as an interest-free or low-interest employer loan generally, just applied to a home-purchase context specifically. Because CRA's prescribed rate is set and updated periodically rather than being one fixed number, the actual benefit calculation depends on checking the current rate for the relevant period rather than assuming an older figure still applies — this is exactly the kind of number that shifts over time and needs confirming case by case.

Given that a home-purchase loan is often a larger amount than a typical employer loan, the taxable benefit from the rate gap can add up to a meaningful amount over the life of the loan, so it's worth having payroll or a tax advisor confirm exactly how the benefit is being calculated and reported on your T4 each year, rather than assuming the loan is simply a tax-free perk.