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First Time Home Buyers Programs

First Time Home Buyers Programs


As a first-time homebuyer in Toronto, the process of purchasing your dream home can be daunting. However, there are several programs available to help ease the burden. In this article, I will discuss five programs designed to assist first-time homebuyers in Toronto: 

First Home Savings Account (FHSA)

The First Home Savings Account is a new registered savings plan designed to help prospective first-time homebuyers save for their first home tax-free up to certain limits. An FHSA combines some of the features of a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). Contributions are generally tax-deductible, and when a qualifying withdrawal is made to purchase a qualifying home, the amount withdrawn, including any income or gain, is not taxable.

One of the significant benefits of the FHSA is that the funds withdrawn do not need to be repaid, unlike the RRSP Home Buyers Plan. To be eligible to open an FHSA, you must be a Canadian resident, 18 years or older, and a first-time homebuyer. An individual is considered a first-time homebuyer if they did not live in a qualifying home at any time in the part of the calendar year before the account is opened or in the preceding four years.

Annual contributions are capped at $8,000, up to a $40,000 lifetime contribution limit. Individuals may claim an income tax deduction for FHSA contributions made in the calendar year or in a previous year, to the extent not previously deducted. A maximum of $8,000 unused contribution room can carry forward to the following year.

RRSP Home Buyers Plan (HBP)

The RRSP Home Buyers Plan (HBP) is a program that allows you to withdraw money from your Registered Retirement Savings Plan (RRSP) tax-free to put towards the purchase of your first home. The HBP allows you to withdraw up to $35,000 from your RRSP without penalty, as long as the funds have been in the account for at least 90 days.

If you are buying a home with a partner or spouse who is also a first-time homebuyer, you can both withdraw up to $35,000 from your RRSP, for a total of $70,000 towards the purchase of your home. However, it is important to note that the money you withdraw must be paid back to your RRSP within 15 years, or it will be added to your taxable income.

Land Transfer Tax Rebate Program for First Time Homebuyers

In Toronto and Ontario, homebuyers are required to pay a land transfer tax (LTT) when they purchase a property. The amount of LTT you pay is based on the purchase price of the property. However, as a first-time homebuyer, you may be eligible for a refund of all or part of the LTT, up to a maximum amount determined by the province.

In Toronto, buyers must pay both the provincial LTT and the Toronto municipal LTT. However, first-time homebuyers may be eligible for rebates on both of these taxes. To be eligible for the land transfer tax rebate, you must:

  • Be a 18 year old Canadian citizen or permanent resident.
  • Have never owned a home anywhere in the world.
  • Use the property as your primary residence within 9 months of the purchase date.
  • Apply for the rebate within 18 months of the purchase date.
  • The purchase price must be less than $500,000 for Ontario's rebate and $400,000 for Toronto's rebate.

If you meet all of requirements you may be able to receive a rebate of upto $4000 in Ontario or $4475 in Toronto. If the property you are purchasing in Toronto has a purchase price of over $400,000, you will only be eligible for a partial rebate of the Toronto municipal LTT

First time Home Buyer Incentive Program

In addition to the above, the Canadian government offers a First-Time Home Buyer Incentive program to help first-time homebuyers purchase their first home. This program allows eligible buyers to finance a portion of their home purchase through a shared equity mortgage with the government. Under this program, the government will contribute up to 5% of the purchase price for a resale home or up to 10% for a new home. The incentive is interest-free and does not require ongoing payments, but must be repaid when the home is sold or after 25 years. This program is designed to help first-time homebuyers afford the costs associated with homeownership, such as mortgage payments, property taxes, and utilities, and is available to individuals with a combined household income of less than $120,000 per year.

First Time Home Buyers Tax Credit (HBTC)

The HBTC program is a non-refundable tax credit that can help first-time homebuyers save up to $750 on their taxes. To qualify, you must be a first-time homebuyer who has not owned a home in the previous four years, and you must purchase a qualifying home such as a mobile home, condo, or existing/newly constructed home. If you're eligible, you and your spouse or common-law partner can both claim the credit. Keep in mind that the credit is non-refundable, meaning it can only be used to reduce your tax owing to zero, and any unused portion cannot be carried forward to future years.


In conclusion, first-time homebuyers often face significant financial barriers that can make it challenging to purchase a home. However, there are several programs available in Canada that can help reduce costs and make homeownership more accessible. These programs include the First Home Savings Account, Home Buyers' Plan, the Land Transfer Tax Rebate, the First-Time Home Buyer Incentive, and the First Time Home Buyers Tax Credit. By taking advantage of these programs, first-time homebuyers can benefit from reduced costs, increased affordability, and greater financial flexibility. Whether you're a young professional, a new family, or someone looking to make their first home purchase, these programs can provide valuable support and assistance in achieving your homeownership goals.

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