There are three main incentive programs for first-time home buyers. Each program has different requirements to qualify as a first-time buyer. See the FAQ below for details.
You can find information about the other programs and incentives with our guide on Incentives for First-Time Home Buyers in Canada.
|Land Transfer Tax Rebate||$||8,475.008.48k|
|+||Government Shared-Equity Incentive||$||25,000.0025k|
* For mortgages of at least $500,000 with down payment under 20%.
Rates provided by Mortgauge Corporation. WOWA assumes no liability for the accuracy of information presented.
† For mortgages of at least $500,000 over a 25-year amortization period.
The Government of Canada offers a First-Time Home Buyer Incentive program that allows you to share part of the ownership and costs of buying your home with the government. Under the program, the government will contribute an additional 5% or 10% of the home's price towards your downpayment in exchange for the same amount of equity in your home. This can significantly reduce your interest payments and CMHC mortgage insurance premiums due to the larger downpayment.
The government's share in your home will have to be repaid within 25 years or when you sell your home, whichever comes first. Any gains or losses in the market value of your home will be shared with the government. This is not a typical loan, and no interest will be charged.
Based on the information you have provided, you are eligible to apply for 5% of your purchase price in shared equity. This works out to a maximum of $25,00025k in government incentives.
The program is only available for CMHC-insured mortgages. Therefore, you are automatically ineligible if
To qualify for a government shared-equity incentive,
Even if you satisfy these criteria, there are limits on how much you can borrow depending on your annual household income. See "What is the borrowing limit, and how does it work" below. Other criteria may apply in special situations.
You qualify as a first-time home-buyer if you satisfy at least one of the following conditions:
Only one spouse/common-law partner needs to meet the above requirements to qualify.
The program launched September 2, 2019, and will end either:
whichever occurs sooner. Many experts expect the funding to go quickly, so it may be prudent to act as soon as possible.
Borrowing limits may apply in both of these cases. See "What is the borrowing limit, and how does it work" section below.
Your borrowing limit is four times your annual household income. Your total borrowing amount (mortgage principal + shared-equity incentive) cannot exceed this limit. The CMHC mortgage insurance premium does not count towards the limit.
No partial incentives are given. The only options are 5% and 10% shared-equity.
The amount you owe depends on the future fair-market value of your property at the time of repayment. You will need pay 5% or 10% of your property's value, depending on which incentive program you applied for. No interest is charged in either case and both gains and losses are shared proportionally with the government.
You must pay back the incentive within 25 years or if the property is sold, whichever occurs first. You must pay the amount in one full lump-sum payment.
There are no prepayment fees or penalties for an early payment. If you believe your property's value will rise in the future, paying early may allow you to benefit from owning a greater share of the home's price appreciation.
Yes. However, you can only apply for the 5% shared-equity incentive option, even if the home is new.
John and his wife want to buy a newly constructed home for $400,000. They would qualify for 10% of the purchase price, or $40,000, under the shared-equity incentive program.
At a 3% interest rate, this would lower their monthly payment from $1,870 to $1,673, saving them nearly $200 per month, or $60,000, over the lifetime of the mortgage.*
Assuming they make the minimum 5% ($20,000) down payment, John and his wife would need to make between $95,000 and $120,000 in total to qualify.
*Assuming a 5-year fixed term with 25-year amortization and 5% down payment.
Marissa makes $80,000 a year, and has $60,000 saved up for a down payment.. To qualify for the shared-equity incentive, she can purchase a home worth up to $380,000.
She buys a resale condo for $360,000. Marissa is eligible for $18,000 from the Government of Canada First-Time Home Buyer Incentive, allowing her to take out a mortgage of only $282,000 plus insurance.
When you acquire a property (and the land it rests on), you must pay a land transfer tax to the government after the transaction closes. You can calculate your estimated land transfer taxes for your locality using Wowa's Land Transfer Tax Calculator. As a first-time home buyer, you are eligible for land transfer tax rebates. A detailed breakdown of your land transfer tax costs and savings is below.
Toronto levies an additional land transfer tax equal in value to the Ontario land transfer tax. You will also need to pay an administration fee of $75 + HST.
Toronto offers a land transfer tax refund of up to $4,475 for first-time home buyers. Since your municipal tax exceeds the rebate limit, your municipal rebate is capped at $4,475.
Ontario levies a land transfer tax by applying a tax-bracket system to your property’s purchase price. The full breakdown of your provincial land transfer tax is shown below.
|Tax Bracket||Marginal Tax Rate||Marginal Purchase Price||Marginal Tax|
|$55,00055k to $250,000250k||1.0%||×||$||195,000195k||=||$||1,9501.95k|
|$250,000250k to $400,000400k||1.5%||×||$||150,000150k||=||$||2,2502.25k|
|$400,000400k to $2,000,0002.00m||2.0%||×||$||100,000100k||=||$||2,0002.00k|
Ontario offers a land transfer tax refund of up to $4,000 for first-time home buyers.Since your provincial tax exceeds the rebate limit, your provincial rebate is capped at $4,000.
New Brunswick charges a land transfer tax equal to 1% of your purchase price.
Nova Scotia does not charge a provincial land transfer tax outside of Halifax. Specific cities may charge a land transfer tax, generally around 1%.
Newfoundland and Labrador charges a land transfer tax of $100, plus 40 cents for every $100 of purchase price over $500 (rounded down).
Prince Edward Island charges a land transfer tax equal to 1% of your purchase price. You are exempt from the tax if:
Alberta does not charge a land transfer tax. However, you will be charged a property registration fee.
The property registration fee has two components:
Your total registration fee is the sum of the two fees above. In our calculations, we assume a 20% downpayment.
Saskatchewan charges a land transfer tax equal to 0.3% of your purchase price. Exceptions apply if your property is worth $8,800 or less.
Each province has their own definitions of a First-Time Home Buyer. Generally:
You may claim an immediate refund (or exemption from the tax) at the time of registration.
Yes. You may have up to an 18 month period after the registration of your new home to apply for a refund.
Yes, in certain cases. After the purchase of a property, you have an 18-month window following registration to obtain a rebate. If you gain citizenship or permanent residency during this period, you can claim the full rebate amount.
The Non-Resident Speculation Tax (NRST), also known as land speculation tax, is a 15% tax on residential property in areas near Toronto.
The tax only applies to individuals who are not citizens or permanent residents of Canada. The specific region involved is known as the Greater Golden Horseshoe region, shown below.
For more information, visit our Land Transfer Tax CalculatorLand Transfer Tax Calculator.
As of March 19, 2019 (as part of Budget 2019), the Home Buyers’ Plan will allow first-time home buyers to withdraw up to $35,000 tax-free from their registered retirement savings plan (RRSP) to buy or build a home. The amount must be repaid over a period of 15 years.
This is a recent increase over the previous limit of $25,000.
You must meet the following criteria to qualify for the Home Buyers’ Plan:
If you have a disability, the last requirement is waived. Additional requirements may apply in special cases.
The Home Buyer's Plan allows you to withdraw before-tax contributions to your RRSP for your downpayment. This can allow you to save significantly more for your downpayment than you would be able to with after-tax income.
For example, if you are in a 40% tax bracket and plan to save $10,000 towards your future downpayment every year, that $10,000 is equivalent to approximately $16,667 of before-tax income. With an RRSP, you would be able to contribute the full before-tax income amount to your future downpayment, allowing you to save 66% more from each paycheck compared to saving in a typical after-tax account.
You can find out more on RRSPs and the March 2nd contribution deadline with our Guide to RRSPs.
The withdrawal limit is per-person. Each spouse/common-law partner has their own, separate withdrawal limit. If you are married or in a common-law relationship, you can withdraw a total of $70,000.
Note that only the person registered as the owner of an RRSP can withdraw from it under the program. Each spouse will need to have their own RRSP account to take advantage of the increased limit. There are also additional limitations regarding contributions to both individual and spousal RRSPs where contributions have to be made at least 90 days before the first withdrawal.
You must submit a Form T1036 to your financial institution for each withdrawal you wish to make.
You can make an unlimited number of withdrawals within one calendar year up to a total of $35,000. Withdrawals made during January of the following year are also tax-exempt. Because of this, we recommend either a single withdrawal or to start withdrawing early within the year.
You have up to 15 years to repay the amount withdrawn to your RRSP. Repayments start the calendar year after the withdrawal is made. Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers’ Plan statement of account listing your remaining balance and minimum payment.
If you make more than your minimum payment, your later minimum payments will be reduced. You may repay the full loan amount at any time without penalty.
To make a repayment under the Home Buyers’ Plan (HBP), you need to make a contribution to your RRSP and designate a portion of the contribution as an HBP repayment. You may make this designation on line 246 of Schedule 7 when filing your next tax return.
Jessica and her husband want to buy a home in Toronto for $900,000, but only have $80,000 saved for a down payment. Assuming an interest rate of 3%, their monthly payment would normally be $4,036 per month.*
Jessica and her husband each withdraw $35,000 from their own RRSP account. In total, they make a down payment of $150,000, lowering their monthly mortgage payment to $3,649. That’s a savings of $387 per month, or $116,000 over the lifetime of their mortgage.
To repay the loan, they will need to make an annual payment of $4,667 for 15 years. No interest or tax is charged on the RRSP withdrawal.
*Assuming a 5-year fixed term with 25-year amortization.
Nathan purchased a home five years ago with the help of the RRSP Home Buyers’ Plan. He withdrew the maximum of $35,000, and has made the minimum $2,333 annual payment each year.
This year, however, Nathan can only afford to make a payment of $1,000. The missing $1,333 is filed as taxable income on his next return. Since his remaining balance is now larger than planned, his minimum payment increases to $2,481 starting next year. No other fees or penalties are charged.
There are many programs that help first-time home buyers in Canada with many provinces and territories offering their own incentives. You can find out more about your available options with our guide to First-Time Home Buyer Incentive Programs in Canada.