Understanding Ontario’s Home Buying Incentives: A Detailed Guide

Purchasing a home in Ontario can be made more accessible through a variety of government programs designed to assist first-time home buyers and those facing financial challenges. Here’s a comprehensive overview of key incentives currently available:

1. First-Time Home Buyer Incentive (FTHBI)

The First-Time Home Buyer Incentive offers a significant advantage by providing 5% of the purchase price for a resale home and 10% for a new construction to lower monthly mortgage payments. This program is particularly helpful in Ontario, where real estate prices are generally high. Notably, the incentive is treated as a shared equity mortgage with the government, meaning there’s no interest, and repayment is due when the home is sold or after 25 years, whichever comes first. The repayment amount adjusts based on the home’s value at the time of repayment, ensuring that the government shares in any gains or losses in home equity​.

2. RRSP Home Buyers’ Plan

Another significant aid for first-time buyers is the RRSP Home Buyers’ Plan, which allows individuals to withdraw up to $35,000 from their RRSPs tax-free to finance a home purchase. This program requires the funds to be repaid within 15 years, helping Canadians leverage their retirement savings to build home equity​.

3. Land Transfer Tax Rebates

Ontario offers rebates on the provincial land transfer tax to first-time home buyers, which can cover up to $4,000 of the tax due. Additionally, the City of Toronto provides a Municipal Land Transfer Tax Rebate, potentially adding up to another $4,475 in savings for eligible buyers. These rebates are particularly beneficial in reducing the upfront costs associated with purchasing a home​.

4. HST/GST New Housing Rebate

The HST/GST New Housing Rebate allows buyers to recover a portion of the HST or GST paid on a new or substantially renovated home, which can be a substantial amount, especially in new construction deals​.

5. Additional First-Time Home Buyers’ Tax Credit

This tax credit provides up to $750 in federal tax relief to help cover expenses like legal fees and land transfer taxes. It’s an upfront benefit that can help reduce the total cost of purchasing a home​.


These incentives are designed to make home ownership more attainable and affordable, especially for those entering the housing market for the first time in Ontario. By reducing upfront costs, lowering monthly payments, and providing flexible repayment options, these programs help many achieve their dream of owning a home. Prospective buyers are encouraged to explore these options and consider their eligibility to capitalize on these benefits effectively. For more detailed guidance and application procedures, consulting with real estate experts and financial advisors is highly recommended.


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