Government Programs for Home Buyers

CMHC Purchase Plus Improvements

CMHC-insured loans can cover both the purchase price and the cost of immediate major improvements, so you get a single first mortgage, one payment and first-mortgage rates instead of separate financing.

The insured loan is based on the lower of the purchase price plus renovation cost, or the 'as-improved' market value. You'll need at least 5% down on the total (purchase plus renovations), cost estimates for the work, and qualification through an approved lender. Minimum down payment is 5% up to $500,000, 10% on the portion above $500,000; insurance isn't available above $1,000,000.

RRSP Home Buyers' Plan (HBP)

The HBP lets you withdraw up to $60,000 from your RRSPs in a calendar year to buy or build a qualifying home; couples can each withdraw up to $60,000.

You must be a first-time buyer (you may still qualify even if you previously owned, subject to the four-year rule), have a written agreement to buy or build, and intend to occupy the home as your principal residence within a year. You cannot withdraw more than $60,000 tax-free. Repayment starts the second year after withdrawal, over up to 15 years.

5% Down Payment Program

With as little as 5% down — from personal savings, gifts or other eligible sources — buyers can access mortgage insurance and enter the market, as long as they can manage ownership costs.

Available to first-time and repeat buyers. Housing costs can use up to 32% of gross monthly household income; the maximum amortization is 25 years. Insurance premiums run about 2.75% (personal down payment sources) to 2.9% (other sources) of the loan and can be added to the mortgage. Buyers must show they can cover closing costs of at least 1.5% of the purchase price.

HST New Housing Rebate

If you build or substantially renovate a home (or buy a new one) as your primary residence, you may recover part of the GST/HST paid. Resale homes generally don't attract HST, though associated services (like inspections) do.

An eligible buyer can claim 36% of the federal 5% portion on a new home priced up to $350,000 (max $6,300), reduced proportionally between $350,000 and $450,000, and nil at $450,000+. In Ontario you can also claim 75% of the provincial 8% portion, capped at $24,000. In the GTA, builders often include HST in the price and take the rebate as an assignment.

Land Transfer Tax (LTT) Rebate — first-time buyers

First-time buyers of an eligible Ontario home may qualify for a refund of all or part of the land transfer tax. Since January 1, 2017 the maximum refund is $4,000 — meaning no LTT on the first $368,000 of value for qualifying buyers.

To qualify you must be at least 18, occupy the home as your principal residence within nine months, and never have owned an eligible home anywhere in the world. Apply within 18 months of registration. The refund is reduced proportionally if a co-purchaser isn't a first-time buyer.

First-Time Home Buyer Tax Credit

The First-Time Home Buyer Tax Credit offers a $5,000 non-refundable credit on a qualifying home, providing up to $750 in federal tax relief. You (or your spouse/common-law partner) must have acquired a qualifying home and not lived in another home you owned in the year of purchase or the four preceding years.