What first-time homebuyer credits and programs are available?

While you work towards saving for a down payment and closing costs, below is information about the various programs and credits available to first-time home buyers. Some of these may help you reach the 5% amount quicker but do have pros and cons to consider.
You can also get insights and tips by visiting CMHC’s website to review the Homebuying Step by Step Guide.
The program offers 5 or 10% of the home’s purchase price to put toward a down payment. The Incentive must be paid in full – that is no partial payment – after 25 years or when the home is sold. Porting your mortgage also counts as a sale. Here are some examples. The amount you could get is technically a second mortgage, shared jointly with the government.

These are a few criteria to determine your eligibility for the First-Time Home Buyer Incentive:

  • your total annual qualifying income doesn’t exceed $120,000.
  • your total borrowing is no more than 4 times your qualifying income.
  • you or your partner are a first-time homebuyer
  • you are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada.
  • you meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member).
There are pros and cons. It may help to purchase earlier but you do have to pay it back later at market value NOT what you borrowed initially. I’ve included an example chart below.
Image source: Government of Canada
According to the government, the Incentive may be associated with additional costs:
  • Additional legal fees: Your lawyer is closing 2 mortgages so you may be charged higher fees.
  • Appraisal fees: To repay your incentive, you may need to have an appraisal done to determine the fair market value of your home.
  • Other fees: Additional fees may be incurred throughout the life cycle of the incentive, like switching your first mortgage to a new lender or refinancing your first mortgage.
  • Property Insurance premiums: Additional costs may be incurred to account for an additional mortgage registered on the property. Talk to your insurance broker or insurance provider to find out more details.
2) First Time Home Buyers‘ Tax Credit of $750
There is a first-time home buyers tax credit. You will claim this on your first taxes after your purchase. It does not impact your purchase but will impact your return tax or the amount owing. 
3) Tax-free first home savings account (FHSA)
The most recent one, just announced in the latest federal budget, begins in 2023 and allows $8,000 tax-free to be saved per year and used towards a down payment within 15 years.
4) The Home Buyers‘ Plan
You can use RRSP savings through the Home Buyers Plan. The max is $35,000 per person. This would be paid back over 15 years on your income tax or by contributing to your RRSP again. As you continue to save, I suggest using a TSFA or other joint savings that will also allow more options to use the money.
5) First-time home buyer land transfer tax rebate
First-time home buyers may be eligible to get a rebate of up to $4,000 for any land-transfer tax paid on the first $368,000 of qualifying homes. To claim the refund, you must be a legal adult who has never owned a home or an interest in a home (even one you inherited or were gifted by a family member).

The Home Ownership Program (HOP) assists low-to-moderate income households to buy affordable homes by providing down payment assistance in the form of a forgivable loan.

Households that are currently renting in the City of Kingston or the County of Frontenac and who do not have a vested interest in any other real estate may apply to the HOP for down payment assistance equal to 10% of the purchase price to a maximum of $44,000.

If you have a combined, pre-tax household income of less than $91,000 and would like to purchase a home priced at $440,000 or less in the City of Kingston or the County of Frontenac, you may be eligible for this program.