Buying your first home in Ontario remains a major financial challenge in 2025. With average property values sitting at $877,300 across the province (Toronto surpassing $1.1 million), affordability continues to be a concern for new buyers. However, several provincial, municipal, and federal home buyer incentive programs exist to ease the burden of home ownership.

This guide breaks down every available home buyer incentive and first time program in Ontario as of 2025 what’s available, how to qualify, and how much you can save.

Ontario Housing Market in 2025

Ontario average home price (Q1 2025): $877,300
Toronto average price: $1.13M
Mississauga: $996,000
Ottawa: $733,000

Interest rates have stabilized around 5.25%, but tighter lending rules remain. High down payments and land transfer taxes are top barriers. That’s where a home buyer incentive can make a meaningful difference, reducing upfront costs and increasing affordability for many.

More than 52% of first time buyers in Ontario in 2024 received financial help from family, and many are relocating outside the GTA in search of affordability even with the availability of multiple home buyer incentive tools.

Who Qualifies as a First Time Home Buyer in Ontario?

You’re considered a first time buyer if:

• You haven’t owned a home in the past 4 years

• You’re a Canadian citizen or permanent resident

• You plan to live in the home within 9 months

Exceptions apply. Even in unique situations such as divorce or buying for a dependent, you may still be eligible for a home buyer incentive.

In joint ownership scenarios, only the qualifying buyer can access rebates or credits. If your co buyer doesn’t qualify, you’ll receive partial benefits from the home buyer incentive programs.

Federal Incentives (2025)

RRSP Home Buyers’ Plan (HBP)

• Withdraw up to $60,000 tax free

• Couples: Up to $120,000 combined

• Repay over 15 years

As a flagship home buyer incentive, the HBP is widely used to reduce financial strain at closing. In 2023, more than 80,000 Canadians took advantage of this.

Tax Free First Home Savings Account (FHSA)

• $8,000 annual limit, $40,000 lifetime

• Tax deductible contributions

• Tax free withdrawals for home purchases

This new home buyer incentive became available in 2023 and is growing rapidly in popularity. Transferring RRSP savings to an FHSA is also possible with no tax consequences.

GST/HST New Housing Rebate

If you’re buying a new construction home under $450,000, this federal home buyer incentive can save you thousands. Even higher priced properties may qualify for partial provincial rebates.

Ontario Incentives

Ontario Land Transfer Tax Refund

• Max refund: $4,000

• Applies to homes under $368,000

As a home buyer incentive, this refund is credited directly at closing. It’s one of the first rebates your lawyer will apply for.

First Time Home Buyers’ Tax Credit (HBTC)

• Non refundable credit worth $750

• Claimed during tax filing

A small yet useful home buyer incentive to help offset purchase related costs.

Toronto Municipal Land Transfer Tax Rebate

• Additional $4,475 refund for eligible buyers

• Combined with provincial = $8,475

This home buyer incentive is exclusive to Toronto, where housing costs remain some of the highest in the country.

Local & Regional Programs in Ontario

Many municipalities offer forgivable loans or down payment assistance. These home buyer incentive programs are often limited in funding and come with income and purchase price caps.

Applying early is crucial, as these home buyer incentive options tend to run out quickly each year.

Recently Discontinued Programs

First Time Home Buyer Incentive (FTHBI)

This federal home buyer incentive ended in March 2024. It provided a shared equity loan but was phased out due to limited interest. It’s now replaced by more practical tools like FHSA and HBP.

Down Payment Rules in Ontario (2025)

• Under $500K: 5% minimum

• $500K to $999K: 5% first $500K + 10% on remainder

• $1M+: 20% required

For buyers contributing under 20%, mortgage insurance applies. A home buyer incentive can help cover the shortfall and reduce how much you need to borrow.

Tax Credits Available

Home Buyers’ Amount

• $5,000 credit = $750 refund

Multigenerational Home Renovation Tax Credit (MHRTC)

• Up to $7,500 refund for modifying a home for extended family

These tax based home buyer incentive options are often underutilized but can bring real savings, especially when paired with physical renovations.

Common Pitfalls to Avoid

• Skipping the FHSA assuming RRSP is enough

• Missing limited regional home buyer incentive windows

• Not budgeting for taxes and legal fees

• Choosing a lawyer unfamiliar with rebate applications

Each home buyer incentive comes with its own rules. Missteps can cost thousands if paperwork isn’t filed properly or on time.

Case Study: 2025 First Time Buyer in Ottawa

Name: Ayesha, 29
Home: $530,000 new build condo
Incentives Used:

• FHSA: $32,000

• HBP: $20,000

• Ontario LTT refund: $4,000

• HBTC: $750

Total benefit from home buyer incentive programs: ~$56,750

Out of pocket down payment: ~$3,500

Without these supports, Ayesha would’ve needed over $30,000 upfront. The right combination of home buyer incentive programs made homeownership possible.

Full Buying Timeline for First Time Buyers

• Open FHSA early
• Get mortgage pre approval
• Hire an agent with incentive experience
• Shop, make an offer, and place deposit
• Lawyer applies for every applicable home buyer incentive
• Close and receive keys

Your lawyer and real estate agent play a key role in coordinating rebates and incentives. Be sure they’re familiar with every home buyer incentive available in your area.