First Time Home Buyer Incentives

Are you thinking about buying a home? There are Government Programs designed to help make this a great experience.

Home Buyer Programs

Buying a home is a major event in your life. For many people, this will be the biggest investment they will ever make. There are government programs available to help you achieve your dream of owning a home. There are many different programs to take advantage of, so you will be able to find one that will suit your situation and lifestyle. If you are looking for a general program or one especially for first-time buyers, in a commercial or industrial market, or even if you are into the multi-unit market, ask your Realtor for information on any or all of these programs. The Realtor will help you find the one you are most eligible for.

Available Government Programs

Here are some Government programs currently available to home buyers:

5% Down Payment Program: With this program, you can make a 5% down payment from your own or other sources. You will have access to mortgage insurance and the program will give you the ability to enter the housing market. It will be up to you to manage home ownership costs.

Here are some details you need to know:

You can have a maximum amortization of 25 years under this program.

5% down is applicable on the first $500,000 of the purchase price and 10% on the remaining portion.

The maximum purchase price under this program can be $1,00,000.

The insurance premium rates are demonstrated in the chart below:

Loan–to-ValuePremium on Total Loan
Up to and including 65%0.60%
Up to and including 75%1.70%
Up to and including 80%2.40%
Up to and including 85%2.80%
Up to and including 90%3.10%
Up to and including 95% Traditional Down Payment4.00%

CMHC Purchase Plus Improvements: CMHC (Canada Mortgage and Housing Corporation) has insured mortgage loans to cover a home’s purchase price, and has the benefit of having some funds to pay for immediate improvements or much needed major renovations to the home or property. Because of this option, you don’t need to get more financing for renovations after you buy the home. First-time home buyers get their first mortgage, make a payment, and get first mortgage interest rate benefits. The lending value of the loan will not be more than the renovated property’s market value. When you apply, you must have a 5% down payment, including cost of renovations, estimates of renovations or home improvements, and qualify with an approved lender to get a CMHC insured loan. Need an example?

Purchase Price: $5100,000

Renovations Costs: $25,000

Total Cost: $125525,000

Lending value: $125525,000

Mortgage (Maximum):$118, 750 498,750

5% down payment: $26,250

Want more information? Visit or call 416-221-2642

HST New Housing Rebate in Ontario: If you do any of the following, you may be able to claim a rebate on part of the HST of the purchase price of your new home. This includes the cost of building a house.

- if you buy -a new or renovated house or land from a builder,

- a new modular, floating or mobile home from a builder (or vendor)

- shares in capital stock of co-operative housing


-If you extensively renovate your home, construct, or add a major addition (even if you hire someone else to do it.)

- If your home had to be rebuilt due to fire.

It’s good to know that resale homes do not attract HST, but new homes do. In Ontario, most builders include HST in the home’s price. The rebate would go to the builder as they would be absorbing the cost of HST.

Land Transfer Tax (LTT) Rebate Program: First time home buyers can use this program. If you are a repeat buyer, you will have to pay the tax. If you are a first-time home buyer and have bought a newly built home, you can get the Land Transfer Tax rebate, also known as LTT. The maximum rebate you can get is $4000, which is equivalent to LTT payable on a home with the purchase price of $368,500. You have to be at least 18 years of age and have not owned a house, which applies to spouses as well. If you have received a rebate from OHOSP, or Ontario Home Ownership Savings Plan, you can’t get the LLT Rebate.

Example: Purchase Price/ LTT Calculation

$55,000/0.5% x purchase price

$55,001-$250,000/ 1% x purchase price, subtract 275

$250,001-$400,000 (residential home)/ 1.5% x purchase price, subtract 1525

$250,001 and up (Com mercial)/ 1.5% x purchase price, subtract 1525

$400,001 and up for residential only:/ 0.2% x purchase price, subtract 3525

RRSP Home Buyers' Plan: You can withdraw up to $35,000 from your RRSP with the HMP (Home Buyers’ Plan) so you can buy or build a home that qualifies. Before you withdraw funds, you must have a written agreement to buy a home that qualifies or build a home. You have one year to move into the home after purchase. If you choose to buy the home with your spouse or other family and friends, each person can withdraw any amount up to $35,000. If you or your spouse has owned the house for more than thirty days, you will not be able to withdraw from your RRSP. Remember

You need to meet First-time buyers’ conditions.

If you withdraw funds, you don’t have to pay income tax if you repay into the RRSP.

You have a repayment period of 15 years starting in the second calendar year after the withdrawal.

Try to do withdrawal before October 1, so you have more time for repayment.

To get a tax break, the funds need to be in the RRSP for at least 90 days before withdrawal.

CMHC’s Shared Equity Plan:Canada Mortgage and Housing Coprporation (CMHC) partnered with the Government of Canada to assist Buyers get into the housing market. Under this program, the Buyer for a resale home pays at least 5% of the purchase price and CHMC invests 5%, there by becoming the equity owner of 5% share in the property. The Buyer pays back the 5% share to CMHC either upon the sale of the property or after 25 years whichever comes first.

For the purchase of a newly constructed house, the Buyer pays a minimum 10% of the purchase price and CMHC invests 10%.

Except for Greater Vancouver Area and Greater Toronto Area, the Buyers can have a maximum gross family income of $120,000 and the maximum purchase price can be 4 times the annual income.

In GVA and GTA, these numbers are increased to $150,000 and 4.5 times.

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