First Time Home Buyer Incentives in Canada 2024
There are four main incentive programs for first-time home buyers in Canada:
The Government of Canada First-Time Home Buyer Incentive Has Been Discontinued
Effective March 21, 2024, the First-Time Home Buyer Incentive has been discontinued. All applications will need to be approved by March 31, 2024.
The cancellation of the First-Time Home Buyer Incentive stems from a combination of factors that critically undermined its effectiveness. Primary among these was poor uptake, as the incentive failed to attract the anticipated number of applicants that were willing to share their home’s equity, and possible home appreciation, with the government. Many prospective first-time homeowners also found the requirements overly restrictive, particularly around income limits and borrowing limits, that reduced the eligibility pool.
First Time Home Buyer Calculator
First-Time Home Buyer Programs and Rebates in Canada
There are many programs available for first-time home buyers in Canada. They help make housing more affordable and accessible to many Canadians looking to buy their first home. While many regions may offer their own incentives, there are three programs that are accessible to most Canadians:
Programs like the First Home Savings Account (FHSA) and the Home Buyers' Plan are available to Canadians nationwide. Others like land transfer tax rebates can vary by province and municipality.
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Provincial First-Time Home Buyer Incentives
First-Time Home Buyer Land Transfer Tax Rebates by Province
| Ontario | BC | Quebec | PEI | |
|---|---|---|---|---|
| Max Land Transfer Tax Rebate | $8,475 | $8,000 | $5,000 to $15,000 | N/A |
| Max Qualifying Home Price | N/A | $525,000 | $225,000 to $630,000 | N/A |
Ontario
Ontario Land Transfer Tax
Ontario levies a land transfer tax by applying a tax-bracket system to your property’s purchase price. The full breakdown of your provincial land transfer tax is shown below.
Land transfer tax calculation (without any rebate) for $500,000 property in ON
| Tax Bracket | Marginal Tax Rate | Marginal Purchase Price | Marginal Tax | ||||
|---|---|---|---|---|---|---|---|
| First $55,00055k | 0.5% | × | $ | 55,00055k | = | $ | 275275 |
| $55,00055k to $250,000250k | 1.0% | × | $ | 195,000195k | = | $ | 1,9501.95k |
| $250,000250k to $400,000400k | 1.5% | × | $ | 150,000150k | = | $ | 2,2502.25k |
| $400,000400k to $2,000,0002.00m | 2.0% | × | $ | 100,000100k | = | $ | 2,0002.00k |
| Over $2,000,0002.00m | 2.5% | × | $ | 00 | = | $ | 00 |
| Total Tax | $ | 6,4756.48k | |||||
Source: Ontario Ministry of Finance
Toronto Land Transfer Tax
Toronto levies an additional land transfer tax equal in value to the Ontario land transfer tax. You will also need to pay an administration fee of $86.78 + HST.
Toronto offers a land transfer tax rebate of up to $4,475 for first-time home buyers. You can learn more about the rebate on The City of Toronto page for Municipal Land Transfer Tax Rebate Opportunities.
British Columbia
Ontario Land Transfer Tax
Ontario levies a land transfer tax by applying a tax-bracket system to your property’s purchase price. The full breakdown of your provincial land transfer tax is shown below.
Land transfer tax calculation (without any rebate) for $500,000 property in BC
| Tax Bracket | Marginal Tax Rate | Marginal Purchase Price | Marginal Tax | ||||
|---|---|---|---|---|---|---|---|
| First $55,00055k | 0.5% | × | $ | 55,00055k | = | $ | 275275 |
| $55,00055k to $250,000250k | 1.0% | × | $ | 195,000195k | = | $ | 1,9501.95k |
| $250,000250k to $400,000400k | 1.5% | × | $ | 150,000150k | = | $ | 2,2502.25k |
| $400,000400k to $2,000,0002.00m | 2.0% | × | $ | 100,000100k | = | $ | 2,0002.00k |
| Over $2,000,0002.00m | 2.5% | × | $ | 00 | = | $ | 00 |
| Total Tax | $ | 6,4756.48k | |||||
Source: Ontario Ministry of Finance
Québec
Ontario Land Transfer Tax
Ontario levies a land transfer tax by applying a tax-bracket system to your property’s purchase price. The full breakdown of your provincial land transfer tax is shown below.
Land transfer tax calculation (without any rebate) for $500,000 property in QC
| Tax Bracket | Marginal Tax Rate | Marginal Purchase Price | Marginal Tax | ||||
|---|---|---|---|---|---|---|---|
| First $55,00055k | 0.5% | × | $ | 55,00055k | = | $ | 275275 |
| $55,00055k to $250,000250k | 1.0% | × | $ | 195,000195k | = | $ | 1,9501.95k |
| $250,000250k to $400,000400k | 1.5% | × | $ | 150,000150k | = | $ | 2,2502.25k |
| $400,000400k to $2,000,0002.00m | 2.0% | × | $ | 100,000100k | = | $ | 2,0002.00k |
| Over $2,000,0002.00m | 2.5% | × | $ | 00 | = | $ | 00 |
| Total Tax | $ | 6,4756.48k | |||||
Source: Ontario Ministry of Finance
Prince Edward Island
The real property transfer tax rate in PEI is 1%. The PEI transfer tax exemption waives the property transfer tax for first-time home buyers. You must have resided in PEI for 183 consecutive days before purchasing your home, or have occupied your newly purchased home for at least 183 consecutive days.
There is no limit on the purchase price for first-time home buyers to receive a refund. Prior to 2016, the purchase price limit to be eligible for the refund was $200,000.
Non-first-time home buyers are also exempt from PEI's real property transfer tax if the cost of the property being transferred is below $30,000.
Land Transfer Taxes
In most provinces, when you buy a home or property, you may have to pay a land transfer tax to the provincial government at the time of closing. The amount of tax is usually based on the property's value. Some cities including Toronto also charge a separate land transfer tax.
Your Land Transfer Tax Breakdown
For a $500,000 home in Toronto, Ontario, your land transfer tax would be:
| Total Tax | $ | 4,475 | |
|---|---|---|---|
| Provincial Tax | $ | 6,475 | |
| Municipal Tax | $ | 6,475 | |
| Total Rebate | $ | 8,475 |
Land Transfer Tax Rebate Frequently Asked Questions
Each province has their own definition of a First-Time Home Buyer. Generally:
- You must be at least 18 years of age.
- You must be a Canadian citizen or permanent resident.
- You must occupy the property as your principal residence.
- You cannot have owned a home, or a stake in a home, anywhere in the world, at any time.
- Your spouse/common-law partner cannot have owned a home while they were your partner.
You may claim an immediate refund (or exemption from the tax) at the time of registration.
Yes. You may have up to an 18 month period after the registration of your new home to apply for a refund.
Yes, in certain cases. After the purchase of a property, you have an 18-month window following registration to obtain a rebate. If you gain citizenship or permanent residency during this period, you can claim the full rebate amount.
The Non-Resident Speculation Tax (NRST), also known as land speculation tax, is a 25% tax on residential property in Ontario and a 20% tax in B.C. The tax only applies to individuals who are not citizens or permanent residents of Canada. However, there’s currently a nation-wide home buying ban for those who aren’t citizens or residents of Canada.
The federal ban supersedes provincial programs, meaning the NRST will be irrelevant while the ban is effective. However, NRST will continue to operate even once the federal ban is lifted and when foreign investors are welcomed again. For more information and to calculate the Non-Resident Speculation Tax amount, visit our Land Transfer Tax Calculator.
Provincial Land Transfer Tax Calculators
Government of Canada First-Time Home Buyer Incentive Program
The The Government of Canada offered a First-Time Home Buyer Shared Equity Incentive Program that shared part of the ownership and costs of buying a home with the government. This incentive was discontinued in 2024. Under the program, the government contributed 5% or 10% of the home's price towards the home’s down payment in exchange for the same amount of equity in the home. The benefit of this incentive was the ability to significantly reduce your interest payments and CMHC mortgage insurance premiums due to the larger down payment.
The government's share in your home would have had to be repaid within 25 years or when you sell your home, whichever comes first. Any gains or losses in the market value of your home would be shared with the government. This was not a typical loan, as no interest was charged.
Besides the federal government’s first-time home buyer incentive, some municipalities offer additional shared equity mortgages in the form of down payment assistance programs (DPAPs).
CMHC First-Time Home Buyer Incentive Statistics
Since its inception, the CMHC First-Time Home Buyer Incentive (FTHBI) has benefited 10,952 home buyers. The program was designed to contribute $1.25 billion to 100,000 Canadians over a three-year period. However, up to 2021, the program had only funded $216.5 million in shared equity mortgages. The program was most successful in Quebec and Alberta, where there had been around 3,800 and 2,800 successful applicants respectively. The program was least popular in Victoria, Vancouver, and Toronto housing markets with only 5, 9, and 39 successful applicants.
After the data from the chart below was released, the CMHC expanded the program in May 2021 to increase its popularity in the Toronto, Victoria, and Vancouver CMAs. Previously, the maximum qualifying home purchase price was $505,000. Given the high average household prices in these regions, the program was expanded to a maximum home purchase price of $722,000. The program was shut down in March 2024.
| City | Successful applications | Percentage of all successful applications |
|---|---|---|
| Edmonton | 1,288 | 13.14% |
| Calgary | 636 | 6.49% |
| Winnipeg | 556 | 5.67% |
| Québec City | 419 | 4.27% |
| Montréal | 274 | 2.79% |
| Halifax | 259 | 2.64% |
| Saskatoon | 200 | 2.04% |
| Laval | 190 | 1.94% |
| Gatineau | 167 | 1.70% |
| Lévis | 151 | 1.54% |
| Longueuil | 144 | 1.47% |
| Rocky View County | 128 | 1.31% |
| Regina | 125 | 1.27% |
| Sherbrooke | 118 | 1.20% |
| Terrebonne | 110 | 1.12% |
| Ottawa | 103 | 1.05% |
| Saguenay | 102 | 1.04% |
Source: Response to Order Paper question no. 724, September 1, 2019, to March 31, 2021
First-Time Home Buyer Shared Equity Incentive Frequently Asked Questions
Higher limits apply for homes in the Toronto CMA, Vancouver CMA, or Victoria CMA. The limit for annual household income is increased to $150,000 and the maximum borrowing amount is increased to 4.5 times household income. This also means that your maximum borrow amount can be up to $675,000.
The program is only available for CMHC-insured mortgages. Therefore, you are automatically ineligible if
- your purchase price is $600,000 or above, or
- your down payment is at least 20% of your purchase price.
To qualify for a government shared-equity incentive,
- you must be a citizen or permanent resident of Canada,
- you or your partner must be a first-time home-buyer (see ‘Am I a first-time home-buyer?’ below), and
- your annual household income cannot exceed $120,000 ($150,000 if you live in the Toronto, Vancouver or Victoria CMAs).
Even if you satisfy these criteria, there are limits on how much you can borrow depending on your annual household income. Other criteria may apply in special situations.
You qualify as a first-time home-buyer if you satisfy at least one of the following conditions:
- you have never purchased a home,
- you have gone through a breakdown of marriage or common-law partnership,
- in the last four years, you have not occupied a home owned by you or your partner.
Only one spouse/common-law partner needs to meet the above requirements to qualify.
The program launched September 2, 2019, and ended on March 21, 2024.
Previously, it was slated to end end either:
- after three years (September 2, 2022), or
- when a total of $1.25 billion of incentives have been granted,
whichever occurs sooner. From its launch in 2019 until January 2022, the program had funded less than 20% of its $1.25 billion goal.
How much would I had qualified for?
- For existing, resale, or mobile/manufactured homes, you can apply for a 5% shared-equity incentive.
- For newly constructed homes, you have the option of applying for a 5% or a 10% shared-equity incentive.
Borrowing limits may apply in both of these cases.
Your borrowing limit is four times your annual household income (4.5x for Toronto, Vancouver, and Victoria CMAs). Your total borrowing amount (mortgage principal + shared-equity incentive) cannot exceed this limit. The CMHC mortgage insurance premium does not count towards the limit.
No partial incentives are given. The only options are 5% and 10% shared-equity.
The amount you owe depends on the future fair-market value of your property at the time of repayment. You will need pay 5% or 10% of your property's value, depending on which incentive program you applied for. No interest is charged in either case and both gains and losses are shared proportionally with the government.
You must pay back the incentive within 25 years or if the property is sold, whichever occurs first. You must pay the amount in one full lump-sum payment.
There are no prepayment fees or penalties for an early payment. If you believe your property's value will rise in the future, paying early may allow you to benefit from owning a greater share of the home's price appreciation.
Yes. However, you can only apply for the 5% shared-equity incentive option, even if the home is new.
Examples
John and his wife want to buy a newly constructed home for $400,000. They would qualify for 10% of the purchase price, or $40,000, under the shared-equity incentive program.
At a 3% interest rate, this would lower their monthly payment from $1,870 to $1,673, saving them nearly $200 per month, or $60,000, over the lifetime of the mortgage.*
Assuming they make the minimum 5% ($20,000) down payment, John and his wife would need to make between $95,000 and $120,000 in total to qualify.
*Assuming a 5-year fixed term with 25-year amortization and 5% down payment.
Marissa makes $80,000 a year, and has $60,000 saved up for a down payment.. To qualify for the shared-equity incentive, she can purchase a home worth up to $380,000.
She buys a resale condo for $360,000. Marissa is eligible for $18,000 from the Government of Canada First-Time Home Buyer Incentive, allowing her to take out a mortgage of only $282,000 plus insurance.
RRSP Home Buyers' Plan
The Federal Government’s Home Buyers’ Plan was created in 2019. It allows first-time home buyers to withdraw up to $60,000 tax-free from their registered retirement savings plan (RRSP) to buy or build a home. The amount must be repaid over a period of 15 years, with repayment starting 5 years after the first withdrawal. This is a recent increase over the previous limit of $35,000, and the repayment period has been extended from 2 years to 5 years.
RRSP Home Buyers' Plan Frequently Asked Questions
You must meet the following criteria to qualify for the Home Buyers’ Plan:
- You must be a resident of Canada at the time of withdrawal.
- You must be the owner of the RRSP(s) from which the withdrawals are made.
- Your RRSP contributions must have stayed in the RRSP for at least 90 days before withdrawal.
- Neither you nor your spouse/common-law partner can have owned the relevant home for more than 30 days.
- Neither you nor your spouse/common-law partner can have owned another home in the last four years.
If you have a disability, the last requirement is waived. Additional requirements may apply in special cases.
The Home Buyer's Plan allows you to withdraw before-tax contributions to your RRSP for your down payment. This can allow you to save significantly more for your down payment than you would be able to with after-tax income.
For example, if you are in a 40% tax bracket and plan to save $10,000 towards your future down payment every year, that $10,000 is equivalent to approximately $16,667 of before-tax income. With an RRSP, you would be able to contribute the full before-tax income amount to your future down payment, allowing you to save 66% more from each paycheck compared to saving in a typical after-tax account.
You can find out more on RRSPs and the March 2nd contribution deadline with our Guide to RRSPs.
The withdrawal limit is per person. Each spouse/common-law partner has their own, separate withdrawal limit. If you are married or in a common-law relationship, you can withdraw a total of $120,000.
Note that only the person registered as the owner of an RRSP can withdraw from it under the program. Each spouse will need to have their own RRSP account to take advantage of the increased limit. There are also additional limitations regarding contributions to both individual and spousal RRSPs where contributions have to be made at least 90 days before the first withdrawal.
You must submit a Form T1036 to your financial institution for each withdrawal you wish to make.
You can make an unlimited number of withdrawals within one calendar year up to a total of $60,000. Withdrawals made during January of the following year are also tax-exempt. Because of this, we recommend either a single withdrawal or to start withdrawing early within the year.
You have up to 15 years to repay the amount withdrawn to your RRSP. Repayments start 5 years after the withdrawal is made. Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers’ Plan statement of account listing your remaining balance and minimum payment.
If you make more than your minimum payment, your later minimum payments will be reduced. You may repay the full loan amount at any time without penalty.
To make a repayment under the Home Buyers’ Plan (HBP), you need to make a contribution to your RRSP and designate a portion of the contribution as an HBP repayment. You may make this designation on line 246 of Schedule 7 when filing your next tax return.
Examples
Jessica and her husband want to buy a home in Toronto for $900,000, but only have $80,000 saved for a down payment. Assuming an interest rate of 3%, their monthly payment would normally be $4,036 per month.*
Jessica and her husband each withdraw $35,000 from their own RRSP account. In total, they make a down payment of $150,000, lowering their monthly mortgage payment to $3,649. That’s a savings of $387 per month, or $116,000 over the lifetime of their mortgage.
To repay the loan, they will need to make an annual payment of $4,667 for 15 years. No interest or tax is charged on the RRSP withdrawal.
*Assuming a 5-year fixed term with 25-year amortization.
Nathan purchased a home five years ago with the help of the RRSP Home Buyers’ Plan. He withdrew $35,000 and has made the minimum $2,333 annual payment each year.
This year, however, Nathan can only afford to make a payment of $1,000. The missing $1,333 is filed as taxable income on his next return. Since his remaining balance is now larger than planned, his minimum payment increases to $2,481 starting next year. No other fees or penalties are charged.
GST/HST New Housing Rebate
If you have purchased a newly constructed or substantially renovated home, you may be eligible to reclaim the GST or federal part of the HST charged on the purchase of said property.
This incentive applies to:
- purchasing from a builder or constructing your own home
- renovations where at least 90% of the interior of the existing home has been removed or replaced
- mobile and floating homes
- conversion of non-residential property into a home
- purchasing shares in a co-operative housing project
More terms and conditions apply. See the Government of Canada's website for additional eligibility criteria and information.
Home Buyers' Amount Tax Credit
The 2022 budget announcement proposed an extension to The Home Buyers’ Amount tax credit. Effective in the 2022 tax year, this would double the credit to $10,000 for first-time home buyers. This tax credit is a non-refundable income tax credit on line 31270 of your tax return. This tax credit can be split between you and your spouse, but the amount cannot be greater than $10,000. Similarly, if more than one person is eligible for the tax credit for a qualifying home, only a maximum of $10,000 can be claimed by all claimants. Since non-refundable tax credits are claimed at a rate of 15%, the effective amount of the tax deduction is $1,500.
To qualify for the tax credit, you must be a first-time home buyer. A first-time home buyer is defined as someone who has not lived in a home owned either directly by you or your spouse/partner in the previous four years.
Homes that are eligible include both existing and new construction homes located in Canada, including single-family, semi-detached, townhouses, mobile homes, condominiums, and apartments. The home must be occupied as your principal residence within one year.
If you are not a first-time home buyer, you may still qualify for the Home Buyers' Amount. You can qualify if you are a person with a disability, where you are eligible for the disability tax credit and have filled out form T2201. You can also qualify for the tax credit if you purchased the home for a relative with a disability. The home being purchased must be made with the intention of it being more accessible for the person with the disability than their previous home.
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