First-Time Home Buyer Programs – Ontario
Incentive Programs for First-Time Home Buyers in Ontario
Becoming a first-time home buyer in Ontario is exciting, but it can also be financially challenging. Fortunately, Ontario offers several incentives to make the process more affordable. Keith and I are here to guide you through these opportunities and help you achieve homeownership smoothly.
1. Home Buyers’ Plan (HBP)
What It Is: The Home Buyers’ Plan lets you withdraw up to $60,000 from your Registered Retirement Savings Plan (RRSP) to buy or build your first home.
How It Helps: This program allows you to use your RRSP savings for your home purchase without immediate tax consequences. As long as you repay the amount within 15 years, you can leverage your savings effectively.
Eligibility: To qualify, you must be a first-time home buyer in Ontario. The funds must have been in your RRSP for at least 90 days. Discuss your eligibility with an advisor to make the most of this opportunity.
2. First-Time Home Buyer Incentive (FTHBI)
What It Is: The First-Time Home Buyer Incentive is a shared-equity mortgage program. It helps reduce your monthly mortgage payments without increasing your down payment.
How It Helps: The government offers 5% or 10% of the home’s purchase price towards your down payment. This reduces your monthly mortgage costs and gives you more financial flexibility.
Eligibility:This program is available to first-time home buyers in Ontario with a household income under $120,000. The total borrowing cannot exceed four times your qualifying income.
If you’re interested in learning more about the challenges you might face as a first-time buyer, check out our guide here.
3. Tax-Free First Home Savings Account (FHSA)
What It Is: The Tax-Free First Home Savings Account lets you save up to $40,000 tax-free for purchasing your first home in Ontario.
How It Helps: Contributions are tax-deductible, and withdrawals made to buy your home are tax-free. This makes it a valuable tool for saving towards homeownership.
Eligibility: You must be a first-time home buyer in Ontario and a Canadian resident to take advantage of this account.
4. Land Transfer Tax Rebates for First-Time Home Buyers in Ontario
- Ontario Land Transfer Tax Refund: First-time home buyers can receive a rebate of up to $4,000 on the Ontario portion of their land transfer tax. This rebate can fully cover the tax for homes priced up to $368,000, providing significant financial relief.
- Toronto Land Transfer Tax Rebate: If you’re buying a home in Toronto, you can get an additional rebate of up to $4,475 on the land transfer tax. This is on top of the provincial rebate, offering substantial savings.
Eligibility: To qualify, you must be a first-time home buyer in Ontario. Neither you nor your spouse can have previously owned a home anywhere in the world.
5. Extended Amortization Program for Pre-Construction Homes Under $1,000,000
What It Is: This program allows first-time home buyers to extend their mortgage amortization period from 25 years to 30 years for pre-construction homes priced under $1,000,000.
How It Helps: Extending your amortization period lowers your monthly mortgage payments. This makes it easier to manage your finances while purchasing a new home.
Eligibility: You need to be a first-time home buyer in Ontario purchasing a pre-construction home under $1,000,000 and meet the lender’s eligibility criteria.
6. First-Time Homebuyer Tax Credit (HBTC)
What It Is: The First-Time Homebuyer Tax Credit offers a federal tax credit of up to $1,500 to help cover closing costs like legal fees and home inspections.
How It Helps: This tax credit reduces the financial burden of closing costs, making the home buying process more manageable.
Eligibility: To qualify, you must be a first-time home buyer in Ontario who has purchased a qualifying home.
These incentives can significantly reduce the financial burden of buying your first home in Ontario. By using your RRSP savings, reducing your mortgage payments, or securing tax rebates, you can make homeownership more achievable. Keith and I are committed to helping you navigate these options and make the most of every opportunity. In addition to these incentives, Ontario offers other buyer programs that can support your journey. You can learn more by exploring our detailed guide.
If you’re curious about the minimum down payment required in Ontario or want to explore solutions to common first-time buyer challenges, we’re here to support you every step of the way. Ready to start your journey as a first-time home buyer in Ontario? Reach out to us today for personalized guidance and let’s make your dream home a reality.