Incentives for First-Time Home Buyers in Canada


Perhaps you’ve been saving up for what seems like forever to purchase your first home. When you crunch your home buying budget numbers it may seem that you’ll have to wait just a while longer before you have the freedom to paint the walls teal or lay that awesome hardwood floor in your own space. But with all the incentives available to first-time homebuyers in Canada, you may be closer to your dream home than you think.

First-Time Home Buyer Incentive Program

The First-Time Home Buyer Incentive Program (FTHBI) started in September 2019. This incentive program allows qualified first-time buyers to reduce their down payment by sharing the equity in their home with the federal government through the Canada Mortgage and Housing Corporation (CMHC). In return for contributing towards your total down payment (up to 5% of a resale home’s value or 5% or 10% of a newly constructed home’s value), the CMHC will take an equivalent percentage of the profit (or loss) when you eventually sell the property or after 25 years, whichever comes first. You can also pay it off earlier. This incentive is a loan and you don’t know upfront the dollar amount you will have to pay back. However, the additional downpayment will lower the amount you need to borrow and reduce your monthly mortgage payments and interest. Since it does share some of your home’s price appreciation with the CMHC, if you think that the value of the home will grow faster than your interest rate and you have no difficulty coming up with the downpayment, this incentive may not appeal to you. 

Strict rules are in place to determine eligibility for this incentive. You are considered a first-time buyer if you have never owned a house before or if you haven’t lived in a house owned by you or your spouse for the past four years. This means that you can have bought and sold a property previously, but just not within the past four years.

This incentive is only in place until September 2022 or until the $1.25 billion allocated to the program runs out. Prime Minister Trudeau announced in September 2019 that the maximum household income in the FTHBI would increase to $150,000 from $120,000 and that the maximum purchase price allowed in hot property markets, such as Vancouver, Victoria and the Greater Toronto Area, would increase to $750,000. However, these changes have not been reflected on the official website as of December 2019.

You can find out more First Time Home Buyer Incentives using WOWA’s First Time Home Buyer Incentive Calculator

First-Time Home Buyers Tax Credit


The First-Time Home Buyers Tax Credit (HBTC), introduced by the Federal Government in 2009, offsets some of the many costs of buying a first home. It consists of a $5,000 non-refundable income tax credit, which translates to up to $750 in federal tax relief. It’s not just first time buyers who qualify; if you haven’t owned your own home for at least four calendar years and 31 days before you withdraw the funds or you’re helping a relative with a disability to buy a home, you may also be eligible for the HBTC.


If you buy your first home in Saskatchewan, Quebec or Nova Scotia, you can also claim a provincial tax credit on your personal income tax filing.

Saskatchewan residents who are eligible can claim a provincial non-refundable tax credit of up to $1,050 on qualified homes in 2019. The eligibility rules are the same as for the federal first-time buyers’ tax credit.

The Quebec HBTC began in January 2018 and first-time buyers can claim a tax credit amount of $5,000 multiplied by the lowest personal income tax rate that, in 2019, is 15%. So, the maximum Quebec provincial tax reduction for the 2019 tax year is $750.

First-time home buyers in Nova Scotia can claim a rebate of 18.75% of the provincial portion of the HST to a maximum of $3000. However, this rebate is only available on newly constructed homes.

Land Transfer Tax Rebate

When buying any property you’ll have to pay land transfer tax, which can work out to be quite expensive. However, as a first-time purchaser, you may be eligible for a provincial and/or municipal rebate that can significantly reduce the cost.

If you are a first-time home buyer in Ontario, Prince Edward Island, or British Columbia you can potentially qualify for land transfer tax rebates. If you buy your property in Toronto, Ontario, the municipality will also refund you the full amount of their municipal land transfer tax up to a maximum amount.

You may also have to pay other closing costs in addition to land transfer taxes.

Home Buyers’ Plan

The Home Buyers Plan is a way for qualified first-time buyers to temporarily withdraw money tax-free from their RRSPs to put towards the purchase of a newly constructed or pre-owned home. A first-time buyer in this plan is a person who has never owned a home or hasn’t, in the previous four years, lived in a home owned by themselves or their spouse. The current maximum RRSP withdrawal is $35,000. You have to make annual payments into the RRSP, starting in the second year after the year you withdrew the funds, to repay the money within 15 years. There is an annual deadline to contribute to your RRSP, so be sure to contribute before then!

Newcomers to Canada

If you’re a newcomer to Canada planning to buy your first home, check with your local bank for any new immigrant mortgage programs specially tailored for you. Most banks, credit unions and lending institutions have their own unique products and make provisions for potential homeowners who do not have an established Canadian credit history. However, you may be asked for a 35% down payment on the home. You can find

Look locally

While these are the major federal and provincial incentives for first-time homebuyers in Canada, individual cities and municipalities throughout the country may have their own unique programs to encourage people to buy their first home in that region. For example, Edmonton, Alberta, has the First Place Program to help low-income families get their first home.

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