Government of Canada - First Time Home Buyer Programs

Are you a first-time homebuyer? 

You may be considered a first-time homebuyer if you meet ONE of following qualifications:

• you have never purchased a home before

• you are experiencing the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements)

• in the last 4 years, you did not occupy a home that you or your current spouse or common-law partner owned. This 4-year period begins on January 1 of the fourth year before the program 

IMPORTANT: It’s possible that you or your spouse or common-law partner qualifies for the First-Time Home Buyer Incentive (if you are in a married or common-law relationship) with the 4-year clause even if you’ve owned a home.

How does the 4-year period work?

The 4-year period begins on January 1 of the fourth year before the Incentive is funded and ends 31 days before the date the Incentive is funded. For example, if the Incentive will be funded on November 1, 2019, the four-year period begins on January 1, 2015 and ends on September 30, 2019.

First Time Home Buyer's Plan (HBP)

To help with your down payment and closing costs, The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $35,000 in a calendar year from your registered retirement savings plans (RRSPs) without having to pay tax on the withdrawal, to buy or build a qualifying home for yourself or for a related person with a disability. The HBP withdrawals must then be repaid over a 15 year period or included in your income if not repaid. 

You are considered a first-time home buyer if, within a four year period, you did not occupy a home that you, or your current spouse or common law partner owned. You have to be a resident of Canada at the time of the withdrawal, and the funds must be in the RRSP for at least 90 days before the withdrawal. Click here for more information on eligibility. 

First-Time Home Buyer Tax Credit

The First Time Home Buyer Tax Credit offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief.​ You can claim the amount on Line 369 of your tax return, if you did not live in another home owned by your or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer). 

First Time Home Buyer Incentive

A new program available to first time buyers as of September 2019, The First-Time Home Buyer Incentive helps first-time homebuyers without adding to your financing burdens. Eligible first-time homebuyers who have the minimum down payment for an insured mortgage can apply to finance a portion of their home purchase through a through a shared equity mortgage with the Government of Canada. The incentive is a second mortgage on title of the property but does not require that you pay interest. You pay back the incentive in 25 years or when you sell the property (or there are early payback options). 

Eligibility: 

- your qualifying household income is less than $120,000

- you have at least the minimum down payment (5% on the first $500,000, and 10% for any amount above)

- down payment is less than 20% of the home's purchase price (including the incentive)

- you are borrowing less than 4 times your qualifying income (so a maximum of $480,000, including the mortgage, mortgage insurance, and incentive)

Province of Ontario - Land Transfer Tax Rebate

First Time Buyer Land Transfer Tax Rebate

This program gives first time buyers a big break on their closing costs, by offering a rebate on Land Transfer Tax. Unlike the Government of Canada programs above that apply if you have not owned a home in the last four years, the Provincial and Municipal (Toronto) Land Transfer Tax Rebates only apply if you have never owned a home anywhere in the world, at any time. 

The provincial LTT is payable anywhere in Ontario, but with this rebate, a first time buyer purhasing a property for less than $368,000 pays no provincial land transfer tax! Over $368,000, the maximum that a first-time buyer can receive for the provincial LTT is $4,000. 

City of Toronto - Land Transfer Tax Rebate

First Time Buyer Land Transfer Tax Rebate

IN ADDITION to provincial land transfer tax, buying a property in the City of Toronto includes the pleasure of also paying a Toronto land transfer tax. Luckily, for eligible first time buyers, there is also a rebate on the Toronto LTT of up to $4,475. The Toronto LTT rebates are in addition to any provincial LTT rebate the buyer qualifies for.

Want to know how much you're going to pay? Calculate Land Transfer Tax on a specific purchase price HERE.