The Ultimate Guide to Programs for First-Time Home Buyers

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As a first-time home buyer, you may qualify for several government programs that can help you offset the costs of buying your home and use your RRSP savings as part of your down payment.

We’ve assembled information on the most relevant programs but as regulations and programs are subject to change, we recommend checking with us or your accountant when it comes to your eligibility for these programs.

First-time Home Buyers Incentive

The First-Time Home Buyers Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

The First-Time Home Buyers Incentive is a shared-equity mortgage with the Government of Canada where the government has a shared investment in the home.  It offers:

  • 5% or 10% for a first-time buyer’s purchase of a newly constructed home
  • 5% for a first-time buyer’s purchase of a resale (existing) home
  • 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home
  • If you participate in this program, the government, as an equity owner, shares in both the upside and downside of the property value.


You will have to repay the incentive based on the property’s fair market value at the time of repayment. If a homebuyer received a 10% incentive, they would repay 10% of the home’s value at the time of repayment.

For example, you purchased a home at $350K and received $35K from the program.  If you sell it a few years down the road for $500K, you would repay the government $50K for their equity stake.

The homebuyer must repay the incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the incentive in full any time before, without a pre-payment penalty.

Eligibility For The First-time Home Buyers Incentive

These are the few criteria to determine if you are eligible for the First-Time Home Buyer Incentive:

  • Your total annual qualifying income doesn’t exceed $120,000
  • Your total borrowing is no more than 4 times your qualifying income
  • You or your partner are a first-time homebuyer
  • You are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
  • You meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member)

First-time Home Buyer Tax Credit

The Government of Canada provides a tax credit for first-time home buyers.  After you purchase your first home and submit your tax return, you can access this tax credit.  If you are an eligible homebuyer, you can apply for the First-Time Home Buyer’s Tax Credit, which equates to a total tax rebate of approximately $750.  

Eligibility For The First-time Home Buyer Tax Credit

To be eligible for the Home Buyers’ Tax Credit, you must meet both of these criteria:

  • • You or your spouse or common-law partner purchased a qualifying home.
  • • You are a first-time home buyer, which means that you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.

A qualifying home is almost any type of home as long as it is located in Canada and registered in your or your spouse or common-law partner’s name. This includes existing homes and homes under construction.

If you are eligible, you can claim a tax credit of $5000 on line 31270 of your tax return, however, we highly encourage speaking with your accountant to ensure you meet all qualification criteria.

RRSP Home Buyers' Plan

One great source of funding for your mortgage down payment is a Registered Retirement Savings Plan (RRSP). The Canadian government's Home Buyers' Plan (HBP) allows first time home buyers to borrow up to $35,000 from your RRSP for a down payment, tax-free.

If you're purchasing with someone who is also a first-time homebuyer, you can both access up to $35,000 from your RRSP for a combined total of up to $70,000. Think of the HBP as a tax-free loan to yourself to fund your down payment.  The only catch is that it must be repaid within 15 years.   Repayment is as simple as designating an HBP repayment amount on your annual tax return, but please beware that there will be a minimum amount required to be repaid each year, so budget accordingly.

Eligibility For The RRSP Home Buyers' Plan

In order to be eligible for the HBP as a first-time homebuyer, you must meet the following criteria:

  • You must be considered a first-time home buyer.  You are considered a first-time home buyer if, in the four-year period (that begins on January 1st of the fourth year before the year you withdraw the funds) , you did not occupy a home that you or your current spouse or common-law partner owned.
  • You must have a written agreement to buy or build a qualifying home, either for yourself or for a related person with a disability
  • You intend to live in the home within one year of purchase as your primary residence
  • The RRSP funds you borrow must have been in your registered (RRSP) account for at least 90 days prior to withdrawal
  • You must make the withdrawal from your RRSP within 30 days of taking title of the home
  • You must be a Canadian resident


Land Transfer Tax Rebate for First-time homebuyers

Land transfer taxes are paid to the government at closing. To calculate what you may owe on closing, click here for our calculator.

First-time homebuyers in Ontario can qualify for a rebate equal to the full amount of their land transfer tax, up to a maximum of $4,000.

To qualify for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, you must meet the following criteria:

  • You must be a Canadian citizen or permanent resident of Canada,
  • You must be 18 years of age or older,
  • You must live in the home within 9 months of purchasing it,
  • You cannot have owned/had a financial interest in a home before, and
  • If you have a spouse, they cannot have owned a home during the time they have been your spouse.

Based on the Ontario land transfer tax rates, the rebate will cover the full tax amount up to a maximum home purchase price of $368,333.  For homes with purchase prices over $368,333, homebuyers will qualify for the maximum rebate, but will still owe the remainder of their land transfer tax. If you are buying your home with your spouse, but only one of you qualifies for this rebate, you can still receive 50% of the rebate.

If you qualify, Deeded can connect you with one of our independent real estate lawyers who can help you file the necessary paperwork to get the rebate. Contact our team and we can help you get started on the process to claim your rebates immediately.

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