Buying your first home is a major milestone, but in Ontario’s competitive and expensive real estate market, it can also feel like an uphill climb. From rising property prices to unexpected closing costs, many first-time homebuyers are left wondering how they’ll ever afford to break into the market.
The good news? You're not in it alone. Both the federal and provincial governments offer a range of incentives, rebates, and tax breaks specifically designed to help first-time buyers get through the door of homeownership. The not-so-good news? Many people don’t know these incentives exist—or how to take full advantage of them.
In this blog post, we’re breaking down the key Ontario first-time buyer incentives you might be missing out on in 2025. Whether you’re actively house-hunting or just beginning to plan, understanding these programs can help you save thousands of dollars.
1. Ontario Land Transfer Tax Refund
Let’s start with a big one. In Ontario, when you buy a home, you must pay a Land Transfer Tax (LTT). The amount depends on the purchase price and can quickly run into the thousands. Thankfully, if you’re a first-time buyer, you may qualify for a refund of up to $4,000.
Who’s Eligible?
- You must be at least 18 years old.
- You must be a Canadian citizen or permanent resident.
- To qualify, you’re required to move into the home and make it your main residence within nine months of the purchase date.
- You (and your spouse, if applicable) must have never owned a home anywhere in the world.
How It Helps:
If you’re buying a home for $400,000, your LTT would typically be around $4,475. Thanks to the $4,000 rebate, your land transfer tax bill could drop to just $475—offering a significant break on closing-day expenses.
2. Toronto’s Municipal Land Transfer Tax Rebate
If you’re buying within the City of Toronto, you’ll face an additional Municipal Land Transfer Tax (MLTT) on top of the provincial one. First-time buyers in Toronto may also qualify for an additional rebate of up to $4,475 on the city’s portion of the land transfer tax.
Who’s Eligible?
The criteria are nearly identical to the provincial LTT refund, but the home must be located within Toronto’s city limits.
How It Helps:
This rebate can cover the full municipal LTT for properties priced around $400,000 or less, and offer partial relief for more expensive homes.
3. First Home Savings Account (FHSA)
Introduced in 2023, the First Home Savings Account (FHSA) blends features of both RRSPs and TFSAs, providing Canadians with a purpose-built tool to save towards their first home purchase.
Key Benefits:
- Annual contributions can reach up to $8,000, with a cumulative lifetime cap set at $40,000.
- Contributions are tax-deductible, like an RRSP.
- Withdrawals (including investment gains) are tax-free when used for a first home purchase.
Who’s Eligible?
- You must be between 18 and 71 years old.
- You must be a first-time homebuyer (no home ownership in the past four years).
- You must be a resident of Canada.
Why It Matters:
Contributions offer a tax deduction, and the investment growth inside the account is completely tax-free. If used properly, the FHSA can fast-track your down payment without giving the CRA a cut.
4. RRSP Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows you to withdraw up to $60,000 from your RRSP (as of 2024) to buy or build your first home—without paying taxes on the withdrawal. You have 15 years to repay the amount to your RRSP.
Who’s Eligible?
- You must be a first-time buyer, or not have owned a home in the last four years.
- The home must be your principal residence.
- A formal contract to either purchase or construct a qualifying home is required to access these funds.
How It Helps:
This is a popular option for buyers who’ve been contributing to their RRSP and want to tap into those savings to cover part of the down payment or closing costs.
5. GST/HST New Housing Rebate
If you’re buying a newly built home (or one that’s substantially renovated), you may be eligible for a rebate on a portion of the GST or HST paid.
Federal Rebate:
- Available if the home costs $450,000 or less before tax.
- Offers up to 36% rebate on the GST portion.
Ontario Rebate:
- Eligible buyers may receive a refund of up to $24,000 toward the provincial portion of the HST when purchasing a newly built home.
Who’s Eligible?
- The home must be your primary residence.
- The rebate is often factored into the builder’s price but can also be claimed separately.
6. CMHC First-Time Home Buyer Incentive (Currently On Hold, But Worth Watching)
This shared equity program was paused in 2024, but many expect it may return in a revised form. When active, the government provided 5% or 10% of the home’s purchase price to be repaid when the property was sold.
Though currently unavailable, it’s worth keeping an eye on—especially for those looking to reduce their monthly mortgage payments.
7. Municipal Grants and Local Programs
Some Ontario municipalities offer unique programs to assist local buyers. For example:
- The Region of Peel’s Homeownership Program: Provides support with down payments for qualifying households with modest to moderate incomes.
- Halton Region’s Assisted Homeownership Program: Provides interest-free down payment loans.
These programs vary from year to year and have specific eligibility rules, so check with your local municipality or region.
8. Builder Incentives and Perks
While not government-based, many developers offer incentives for first-time buyers purchasing pre-construction homes or condos. These might include:
- Reduced deposit structures (e.g., 5% down instead of 20%).
- Free upgrades or appliances.
- Limited-time rebates on closing costs.
Always read the fine print, and be sure to have a real estate lawyer review your agreement before signing.
9. Energy Efficiency Rebates
If you're purchasing an older home and plan to upgrade its insulation, HVAC, or windows, you may qualify for federal or provincial energy-efficiency grants under programs like:
- Canada Greener Homes Grant
- Enbridge Home Efficiency Rebate Plus
These rebates can offer thousands of dollars back on eco-friendly upgrades—reducing your costs and your future energy bills.
The journey to homeownership in Ontario isn’t easy, but first-time buyers have more tools and resources than they often realize. Whether it’s a land transfer tax refund, a tax-sheltered savings plan, or a builder incentive, every bit helps when you’re trying to cover a down payment and close your first deal.
If you’re unsure which programs you qualify for, speak to a mortgage broker, financial advisor, or real estate professional who specializes in first-time buyers. They’ll help you map out your options and create a plan to take advantage of every possible dollar.
Because in this market, the smartest buyers aren’t just saving—they’re strategically unlocking every incentive available.
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