Ontario First Time Home Buyers Program 2025
Do you meet the requirements below? If so, then homeownership may be closer than you think!
As a first-time home buyer, you’ll want to be familiar with various programs that Ontario offers that may beneficial and apply to your situation. Whether it’s a rebate you may qualify for, a tax-efficient way of funding your home down payment, or the minimum you must put down for your home purchase, there’s information you need to know to navigate the buying process and potentially save yourself some money along the way.
Buying a home is often one of the biggest financial investment decisions one will make in his/her lifetime. The First-Time Home Buyer Incentive can help you purchase your first home. This incentive aims to help first-time home buyers without adding to their financial burdens. There are no additional monthly payments. Participants must meet minimum insured mortgage down payment requirements.
What benefits do first-time home buyers get in Ontario?
In Ontario, the First Time Home Buyers incentive, courtesy of the Government of Canada provides:
- 5% or 10% for a first-time buyer’s purchase of a newly constructed home
- 5% for a first-time buyer’s purchase of a resale (existing) home
- 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home
The incentive is available to first-time homebuyers with qualified annual incomes of $120,000 or less. A participant’s insured mortgage and the incentive amount cannot be greater than four times the participant’s qualified annual income.
Here’s an example.
Sharon wants to buy a new home for $400,000.
Under the Ontario First-Time Home Buyer Incentive, Sharon can apply to receive $40,000 in a shared equity mortgage (10% of the cost of a new home) from the Government of Canada. This lowers the amount she needs to borrow and reduces her monthly expenses.
As a result, Sharon’s mortgage is $228 less a month or $2,736 a year.
Who qualifies as a first-time home buyer in Ontario?
You are considered a first-time home buyer in Ontario if, in the last four-year period, you have not owned a home you occupy or your current spouse or common-law partner owned. So if you previously owned a home and sold it 5 years ago, and have not owned a home since, congratulations, you are now considered a first time home buyer!
If you have any more questions regarding buying a home please review the Comprehensive Guide for First-Time Home Buyers or contact Realtor Sean Findlay using the form below.
A Comprehensive Guide for First-Time Home Buyers in Canada
Becoming a homeowner is an exciting milestone, but it requires careful planning and informed decision-making. For first-time buyers in Canada, understanding the financial, legal, and logistical aspects of home buying is essential. Here’s a step-by-step guide to help you navigate the process.
1. Saving for Your Home
A down payment is the first hurdle. Start saving early by incorporating it into your budget:
- Automatic Savings: Set up direct transfers to a savings account.
- Investment Options: Consider low-risk investments like GICs or TFSAs for your short-term goals.
- Down Payment Requirements:
- Homes under $500,000: Minimum 5%.
- Homes between $500,000 and $1.5M: 5% on the first $500,000, 10% on the remaining.
- Over $1.5M: Minimum 20%.
- Home Down Payment Assistance Programs: There are home down payment assistance programs available that will help by providing up to a 15% down payment (up to $250,000) for you to use towards your home purchase. Learn More
- Home Buyer Grants: A home buyer grant is a financial assistance program provided by governments or organizations to help individuals purchase a home. These grants are often targeted toward first-time home buyers or those with specific needs, such as low-income families or residents in certain areas. Unlike loans, grants typically do not need to be repaid.
Use tools like the Financial Goal Calculator to project your savings timeline.
2. Government Incentives for First-Time Buyers
The Canadian government offers various programs to ease the financial burden:
- First Home Savings Account (FHSA): Save up to $40,000 tax-free, with annual contributions capped at $8,000.
- Home Buyers’ Plan (HBP): Withdraw up to $60,000 from your RRSP tax-free for a down payment.
- First-Time Home Buyers’ Tax Credit: A non-refundable credit of $1,500 to offset closing costs.
- GST/HST New Housing Rebates: Get back some taxes paid on newly-built or substantially renovated homes.
- Land Transfer Tax Rebates: Available in provinces like Ontario, British Columbia, and PEI, with rebates up to $8,000.
Check for additional provincial and territorial programs to maximize benefits.
3. Getting Preapproved for a Mortgage
Mortgage preapproval sets a clear budget and shows sellers you’re serious. Lenders assess your financial health, including:
- Debt Ratios:
- Housing costs shouldn’t exceed 39% of your gross monthly income.
- Total debts shouldn’t exceed 44%.
Use the Mortgage Qualifier Tool to check your eligibility.
4. Finding Your Dream Home
Start your search by leveraging online resources, mobile apps, and realtors:
- Realtors: Offer expertise in market trends, negotiation, and paperwork. Their fees are typically covered by the seller.
- Research: Compare neighborhoods, amenities, and long-term investment potential.
5. Understanding Home Buying Costs
Budget for these one-time upfront costs, typically 1.5% to 4% of the purchase price:
- Legal Fees
- Home Inspections
- Title Insurance
- Property Tax Adjustments
6. Navigating Mortgage Insurance
If your down payment is under 20%, you’ll need mortgage default insurance:
- Rates range from 2.8% to 4% of the mortgage amount.
- New as of 2024: A 30-year amortization is available for all first-time buyers, though it adds a 0.2% premium to insurance costs.
7. Becoming a Homeowner
Owning a home brings responsibilities, including maintenance and tax obligations. Key considerations:
- Principal Residence Tax Exemption: Avoid capital gains tax when selling your primary residence by living in the home for at least 1 year.
- Underused Housing Tax: A 1% annual tax on vacant or underused properties, with exemptions for most Canadians.
Tips for a Smooth Buying Experience
- Work with Professionals: A good realtor, mortgage broker, and lawyer are invaluable.
- Plan for the Long Term: Understand amortization periods, interest rates, and repayment terms.
- Stay Informed: Follow updates on government programs and tax incentives.
For more insights, visit Findlay Real Estate or explore resources on Precon Central.
Buying your first home is a significant achievement. With the right preparation and support, you’ll be well on your way to turning your dream into reality.
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For more information or to book a free Century21 Home Buyers Consultation contact:
Sean Findlay – Professional Realtor | Sales Representative
CENTURY 21 Millennium Inc., Brokerage *
Office Phone: 905-450-8300 or Toll Free:1 888-450-8301 | Fax: 905-450-6736
Toronto Real Estate Office Located: 181 Queen St E Brampton, Ontario (by Appointment Only)
Stoney Creek Real Estate Office Located: 280 Barton St, Stoney Creek, ON L8E 2K6 (by Appointment Only)
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