Government Programs and Incentives for First-Time Buyers in Ontario
Discover all the top government programs for first-time buyers in Ontario, including the FHSA, RRSP Home Buyers’ Plan, land transfer tax rebates, and more. A clear guide from a York Region real estate expert.
Buying your first home is exciting, but it can also feel overwhelming when you start adding up the costs. The good news? There are several government programs designed specifically to help first-time buyers save money, build a down payment faster, and make homeownership more achievable.
Here’s a clear breakdown of the most useful programs available to Canadians and how I help my clients take advantage of them.
1. The First Home Savings Account (FHSA)
The FHSA is one of the best tools available for new buyers. It combines the benefits of an RRSP and a TFSA, letting you save money tax-free toward your first home.
You can contribute up to $8,000 a year, up to a lifetime maximum of $40,000. Your contributions are tax-deductible, and when you use the funds to buy your first home, you don’t pay any tax on the withdrawal.
If you and your partner both qualify, you can each have an FHSA, which means a potential combined $80,000 in tax-free savings. I encourage all my first-time buyers to open one early, even before they start house hunting.
2. The Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows you to withdraw money from your RRSP to use toward your down payment. The withdrawal limit is currently $60,000 per person.
You don’t pay tax on this withdrawal as long as you repay the amount over the next 15 years. If you’re buying with a partner, that means you could access up to $120,000 in total to put toward your first home.
When I work with first-time buyers, we often use a mix of FHSA and HBP funds to maximize savings while keeping long-term finances balanced.
3. The First-Time Home Buyer Land Transfer Tax Rebate
When you buy a home in Ontario, you pay a land transfer tax based on the purchase price. For first-time buyers, there’s a rebate that can save you thousands.
The Ontario government offers up to $4,000 off your provincial land transfer tax. If you’re buying in Toronto, there’s also a separate municipal rebate that can save you up to another $4,475.
This rebate is applied at closing, and I always make sure my clients’ lawyers claim it automatically so nothing is missed.
4. The GST/HST New Housing Rebate
If you’re buying a brand-new home or condo from a builder, you may qualify for a rebate on a portion of the GST or HST paid.
This rebate can make a big difference on new builds and pre-construction homes, especially for first-time buyers looking at condos in York Region or the GTA. The amount you get back depends on the price of the home and whether it’s your primary residence.
5. CMHC Programs and Incentives
If you’re putting less than 20 percent down, you’ll need CMHC mortgage insurance. The premiums are built into your mortgage, but CMHC also offers programs that can help lower costs or improve affordability.
For example, there are green home programs that provide a small rebate for buying energy-efficient homes, and special flex-down programs that allow gifted or borrowed down payments in certain cases.
These programs can be tricky to navigate, but I work with mortgage specialists who can confirm exactly what applies to your situation before you buy.
6. How I Help You Take Advantage of These Programs
Knowing these programs exist is one thing, knowing how to use them together is another. When I work with first-time buyers, I help you:
• Identify which programs you qualify for
• Strategically combine FHSA, HBP, and rebates to stretch your down payment
• Work with a mortgage professional to confirm eligibility before we make an offer
• Coordinate with your lawyer to make sure every available rebate is applied at closing
It’s all about making sure no opportunity to save is left on the table.
Final Thoughts
There’s never been a more important time to be strategic when buying your first home. Between tax-free savings accounts, RRSP withdrawals, rebates, and incentives, you may have more options than you think.
If you’re ready to explore these programs and find out how to make your first home purchase more affordable, reach out. I’ll walk you through every step and make sure you’re taking advantage of every benefit available.