list of home buyer incentives canada


As the Canadian housing market continues to soar, housing affordability has become a hot topic and a major issue for buyers.  Demand is outpacing supply and the current price levels mean it’s harder than ever for first-time homebuyers to purchase a home. It’s trying times for buyers, but luckily there are a handful of government programs available that help make affording a home easier.

As a first-time homebuyer (or any homebuyer for that matter), it’s a great idea to familiarize yourself with all the incentives that might apply to your situation.  There are special loan programs, useful tax benefits as well as rebates available which make it easier for you to fund a purchase. We’ve made a list of available programs and incentives that can help you secure a new home sooner and for less than you thought.


First Time Home Buyer Incentive (FTHBI)

Offered by the Government of Canada on a federal level, the First Time Home Buyers Incentive (FTHBI) helps make it easier for first-time buyers to purchase a home and lower their monthly mortgage payment.  The FTHBI is a shared equity mortgage program where the government participates in the upside or downside of your property’s value over time.  First-time home buyers will be able to borrow 5 or 10% of the purchase price of a new home.  The same borrowed percentage of the value of your home must be repaid after 25 years or when the home is sold, whichever comes first.

 The First-Time Home Buyer Incentive offers:

  • 5 or 10% towards the purchase of a newly constructed home for first-time homebuyers.
  • 5% towards the purchase of an existing (resale) home for first-time homebuyers.
  • 5% towards the purchase of a mobile/manufactured home (new or resale) for first-time homebuyers.

Eligibility requirements

  • Applicants must be considered first-time homebuyers (see below).
  • Applicants qualified income must be under $120,000 ($150,000 if the purchase is in Toronto, Vancouver or Victoria).
  • Total borrowing must not exceed four times the applicants qualifying income (4.5 times if the purchase is in Toronto, Vancouver or Victoria).
  • Applicants must be Canadian citizens, permanent residents or non-permanent residents who are authorized to work in Canada.
  • All minimum requirements for down payments must be met with traditional funds (savings withdrawal or collapse of a RRSP, or a non-repayable financial gift from a relative or immediate family member).

Applicants are considered first-time homebuyers if:

  • The applicant or their partner has not previously purchased a home.
  • The applicant has not occupied a home owned by you or a current spouse or common-law partner within the last 4 years.
  • The applicant has experienced the dissolution of their marriage or common law partnership (even if the applicant does not meet the other first-time homebuyer requirements).

The First-Time Home Buyer Incentive is like a second mortgage on the home.  The initial (first) mortgage must be greater than 80% of the property’s value and will be subject to a mortgage loan insurance premium.  The mortgage must also be eligible through Canada Guaranty, Sagen or CMCH.

The mortgage loan insurance premium is calculated based on the loan-to-value ratio of the initial (first) mortgage only.  Mortgage insurance is not paid on the incentive portion – it is included with the down payment total.

The location of the property must be in Canada and must be available and suitable for year-round occupancy.  This must be the applicants place of residence and may not be used as an investment property.

The FTHBI may be subject to additional costs:

Legal fees:  The applicant’s lawyer is closing two mortgages and their fees may increase.

Appraisal fees:  In order to repay the incentive loan, applicants may need to pay to have their home appraised so fair market value can be determined.

Additional fees:  There are sometimes other fees that may be incurred throughout the incentive’s lifecycle, such as refinancing the first mortgage or switching mortgage lenders.

Premiums for property insurance:  There may be additional costs incurred due to the extra mortgage registered on the property.  Speak with your insurance provider or insurance broker for details.

How to repay the First-Time Home Buyers Incentive

The First-Time Home Buyers Incentive must be paid in full – partial payments are not accepted.  The incentive must be repaid within 25 years or when the home is sold, whichever comes first.  However, there are also a few scenarios where repayment can be triggered.

How to apply for the First-Time Home Buyers Incentive

After finding a home to buy, getting pre-approved for a mortgage, and determining eligibility for the incentive, applicants must fill out the two application forms to apply for the First-Time Home Buyer Incentive.

Once the forms are completed, applicants should give them to their lender who will submit the application on their behalf.

Additional Resources


Land Transfer Tax Rebate

In Ontario, when buying land or an interest in land, you must pay a land transfer tax.  If you’re a first-time homebuyer with an eligible home, you may qualify for a full or partial refund of the tax.

In order to claim a refund, you must be at least 18 years of age and you or your spouse (if applicable) cannot have previously owned a home or interest in a home anywhere in the world.  Any previous home ownership will disqualify you for the first-time home buyers land transfer tax refund.  It doesn’t matter how the home was acquired (purchase, gift or as an inheritance).

Land Transfer Tax Refund Amounts & Limitations

As of January 1, 2017, the maximum refundable amount is $4,000.  Regardless of the date when the purchase agreement and sale were signed, this amount only applies to dispositions or conveyances that occurred on or after January 1, 2017.

Land Transfer Tax Limitations

If one (or more) of the purchasers does not qualify as a first-time homebuyer, then the refund will be reduced.  The refund provided will be determined by the amount of interest acquired by the individual(s) who do qualify for the Land Transfer Tax Rebate.

How to Qualify for the Land Transfer Tax Rebate

  • The purchaser of the home must be at lest 18 years of age.
  • The home must be used as the principal resident of the purchaser within 9 months of the date of transfer.
  • The purchaser must be an eligible first-time homebuyer. They must never have owned an eligible home, or interest in an eligible home at any time, anywhere in the world.
  • The purchaser’s spouse must not have owned an eligible home or interest in an eligible home anywhere in the world during the time they were the purchaser’s spouse. If an eligible home has been previously owned by either party, neither spouse will be able to qualify for the rebate.
  • As of January 1, 2017, the Land Transfer Tax Rebate is exclusively for Canadian citizens and permanent residents only.

Rebate application time limit

The eligible purchaser must have applied for the rebate within 18 months of the date of registration of the conveyance or the date when the unregistered disposition takes place.

Additional Resources


First-Time Home Buyers’ tax Credit (Home Buyers’ Amount)

The Canadian government provides eligible first-time homebuyers with a tax credit based on a down payment of $5,000.  Since 2019, eligible buyers whose home purchase qualifies, can apply for a tax refund of $750 by filling out Line 31270 of their tax return.

Eligibility Requirements

  • You or your spouse/partner have purchased a qualifying home (see below).
  • You as the purchaser must qualify as a first-time homebuyer and must not have claimed residence in a home owned by yourself or your spouse/partner during the year you acquire your new home, or within a four-year period preceding the purchase of a qualifying home.
  • Any persons with disabilities are exempt from the requirement of being a first-time homebuyer to qualify for the tax credit.
  • A completed tax return must be submitted to claim the First-Time Home Buyers’ Tax Credit.

Any qualifying home must located in Canada and be registered in your or your spouses’/partners name in accordance with the correct land registration system. Existing and under construction homes are included.

Types of qualifying homes:

  • Single-family houses
  • Semi-detached house
  • Townhouses
  • Condominiums
  • Mobile homes
  • Apartments located in duplexes, triplexes, fourplexes and apartment buildings

Your intention must be to occupy the home as your principal residence within one year of purchase, or you must intend for a related person with a disability to live in the home within the same time period.

Additional Resources


Home Buyer’s Plan (HBP)

The Home Buyers’ Plan (HBP) is a government provided program enabling you to withdraw funds from your registered retirement savings plans (RRSPs) to help you buy or build a qualifying home (see details below) for yourself or for/on behalf of a related disabled person.  As of March 19, 2019, the Home Buyers’ Plan withdrawal limit is $35,000.

What is a qualifying home?

For a home to qualify for the HBP, it must be located in Canada.  Existing homes and those still under construction are included.  If it is located in Canada, a share in a co-op housing corporation that entitles you to possess and provides an equity interest in the housing unit also qualifies.  A right to a tenancy only share in a housing unit is not sufficient to qualify.

Qualifying conditions of the HBP

  • To qualify and be allowed to withdraw funds from a RRSP under the Home Buyers’ Plan, you must be considered a first-time homebuyer or be purchasing or building a home for a related person with a disability.
  • You must deliver a written agreement to buy or build a qualifying home for yourself or for a related person with a disability.
  • At the time of withdrawal from your RRSP(s) you must be a Canadian resident.
  • You must remain a Canadian resident up until the time your qualifying home is bought or built.
  • Your intention must be to occupy the qualifying home as your principal residence within one year of purchasing or building the home. If the qualifying home has been purchased or built for a related person with a disability, your intention must also be for that person to occupy the home as their principal residence within one year.
  • If all other conditions are met, you may qualify to withdraw from your RRSP(s) under the Home Buyers Plan again if your repayable balance is zero on January 1st of the year you plan to make the withdrawal.

Your withdrawal made under the HBP must be repaid into your RRSP, pooled registered pension plan (PRPP), or specified pension plan (SPP) within a 15-year period.  The repayment period begins the 2nd year after the year the funds were first withdrawn from your RRSP(s) under the HBP.  For example, for funds withdrawn in 2021, the first year of repayment would be 2023.

Additional Resources



GST/HST New Housing Rebate

The GST/HST New Housing Rebate can be used to get a return for a portion of the GST/HST paid when you purchased or substantially renovated a home being used as your principal residence.  This rebate is complex, and we recommend consulting your real estate agent or mortgage broker for more details.

Eligibility for the GST/HST New Housing Rebate

  • You have purchased or performed substantial renovations to your principal residence.  Housing on leased property is included provided the lease term is a minimum of 20 years or the option to purchase the land is included.
  • You have purchased a share or shares in a co-operative housing corporation with plans to use a new unit or substantially renovated unit as your principal residence.
  • Your principal place of residence has been newly constructed or substantially renovated by yourself or by a builder and the fair market value of the completed home is less than $450,000.

Additional Resources

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  1. Eric June 8, 2021 at 8:17 pm - Reply

    This was really helpful! Thanks guys

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