First-time buyers 2 min read

First-time buyer in Ontario? The programs worth knowing

Tax-free savings, RRSP withdrawals, land transfer tax rebates and longer amortizations. What each one does, in plain English.

Nima Nojavan-KheiraddinReal Estate Sales Representative, B.Sc.

Buying your first home is the moment the government is most willing to help. The programs below can be combined, and together they can be worth tens of thousands of dollars. Rules change, so confirm the details with your lender, lawyer or accountant before you count on any of them.

The First Home Savings Account (FHSA)

The FHSA works like an RRSP on the way in and a TFSA on the way out: contributions are tax-deductible, growth is tax-free, and a qualifying withdrawal for your first home is tax-free too. You can contribute up to $8,000 a year, to a lifetime maximum of $40,000, and unused room can carry forward (up to $8,000). If you are buying with a partner, each of you can have one.

The Home Buyers’ Plan (HBP)

The HBP lets you withdraw from your RRSP for a first home, up to $60,000 each, and repay it to your RRSP over 15 years. It can be used together with the FHSA, which is how many couples assemble a down payment.

Land transfer tax rebates

First-time buyers get up to $4,000 back on the Ontario land transfer tax. In the City of Toronto, the municipal tax has its own first-time buyer rebate of up to $4,475. Your lawyer usually applies both on closing, so the savings come off your cash to close. The closing cost calculator shows the numbers for any price.

30-year amortizations on insured mortgages

First-time buyers can choose a 30-year amortization even with less than 20% down. A longer amortization lowers the monthly payment, though you pay more interest over time. Try both in the mortgage calculator.

New homes

If you are buying a newly built home, ask about sales tax rebates for first-time buyers. The federal and provincial programs for new homes have changed recently, and eligibility depends on the price and the date of the agreement, so get current advice before you sign.

Who counts as a first-time buyer

Each program has its own definition. Broadly, you have not owned a home you lived in during a recent period, and for the land transfer tax rebates, you have never owned a home anywhere in the world. If you have a spouse who owned while you were together, that can affect eligibility too.

The down payment planner shows how the FHSA and HBP can shorten the time to your first purchase.

Filed under First-time buyersMortgages and financing

This article is general information, not legal, tax, financial or mortgage advice. Rules and programs change; confirm details with your lawyer, accountant or lender before relying on them. This material is not intended to solicit properties already listed for sale, individuals under contract with another brokerage, or self-represented parties, as outlined by RECO guidelines.

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The approach

With me, you don’t buy with confidence, you close with it.

I'm Nima. My work in commercial and investment real estate has taught me to look beyond the property itself, to the numbers, the risks and the details that matter. I bring that same approach to every residential transaction.

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