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 incentives exist to ease the burden of home ownership.

This guide breaks down every available first-time home buyer 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 (Source: CREA)

• Toronto average price: $1.13M

• Mississauga: $996,000

• Ottawa: $733,000

Interest rates have stabilized around 5.25% (BoC Overnight Rate), but tighter lending rules are in place. High down payments and land transfer taxes are top barriers for first-time buyers. Mortgage stress test thresholds also remain high, impacting eligibility.

Affordability continues to erode for many renters seeking ownership. More than 52% of first-time buyers in Ontario in 2024 received financial help from family members, and a growing number are moving outside the GTA in search of affordability.

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 of purchase

Exceptions: Divorce, legal separation, or purchasing for a dependent with a disability may still qualify you. If you’re buying with a spouse or partner who has never owned a home, their status can make part of your purchase eligible for programs.

Note: In cases of joint ownership, only the qualifying buyer can claim rebates and credits. For example, if two co-buyers are listed but only one is a first-time buyer, rebates will be calculated accordingly.

Federal Incentives (2025)

RRSP Home Buyers’ Plan (HBP)

• Withdraw up to $60,000 tax-free from your RRSP

• Couples: Up to $120,000 combined

• Repay over 15 years, starting the second year after purchase

• Must intend to occupy the home as your principal residence

The 2024 federal budget increased the withdrawal limit from $35,000 to $60,000, a 71% increase to help offset rising home prices. According to CRA, over 80,000 Canadians used HBP in 2023, and usage is expected to rise in 2025.

Tax-Free First Home Savings Account (FHSA)

• Annual contribution limit: $8,000

• Lifetime contribution limit: $40,000

• Tax-deductible contributions, tax-free withdrawals for home purchase

• Unused room carries forward

• RRSP-to-FHSA transfers allowed (no tax impact)

FHSA accounts launched in 2023, and over 500,000 Canadians opened one within the first 12 months. Banks like RBC, TD, and Scotiabank now offer specialized FHSA options linked to high-interest savings or mutual funds.

GST/HST New Housing Rebate

• Homes < $350,000: Full GST rebate (36%)

• $350,000–$450,000: Partial rebate

• Above $450,000: No federal rebate, but provincial rebates may apply

• Applies to newly built homes, substantial renovations, and builder purchases

In Ontario, this rebate can reduce your closing costs by thousands, especially for new condos or townhomes bought from a builder. For example, a buyer purchasing a $449,000 new home in Kitchener may receive a federal GST rebate of $6,250 and a provincial component of up to $24,000.

Ontario Incentives

Ontario Land Transfer Tax Refund

• Max refund: $4,000

• Applies to homes < $368,000 (full refund)

• Eligibility: 18+, Canadian citizen or PR, move in within 9 months

This refund applies to any buyer meeting the qualifications. It is credited directly at closing to reduce the overall tax burden, and your lawyer usually applies on your behalf.

First-Time Home Buyers’ Tax Credit (HBTC)

• Federal non-refundable credit worth $750

• Claimed on tax return in the year of purchase

Toronto Municipal Land Transfer Tax Rebate

• Additional $4,475 refund

• Combined with provincial rebate = $8,475 total

• Same eligibility rules apply

Toronto remains the only municipality in Ontario that levies its own land transfer tax. These combined rebates can significantly lower upfront closing costs, especially in high-price areas like downtown Toronto or North York.

Local & Regional Programs in Ontario

Municipal and regional housing programs provide forgivable or interest-free loans, primarily for down payment assistance. Below is an updated 2025 snapshot:

These programs often have waiting lists or limited funding windows. Some require buyer education workshops and pre-approval letters. Always apply early in the year.

Recently Discontinued Programs

First-Time Home Buyer Incentive (FTHBI)

• Ended March 2024

• Previously offered 5%–10% shared equity loan

Many buyers mistakenly still ask about this program. CMHC officially closed it due to low uptake and high admin costs. FHSA and HBP are now the two dominant federal tools.

Down Payment Rules in Ontario (2025)

• < $500,000: 5% minimum

• $500,000–$999,999: 5% on first $500K + 10% remainder

• $1M+: 20% required

Example: For a $750,000 home:

• First $500K × 5% = $25,000

• Remaining $250K × 10% = $25,000

• Total = $50,000 minimum down payment

If you contribute less than 20%, you must pay mortgage loan insurance, which can range from 2.8% to 4.0% of the mortgage value. This fee is usually added to your mortgage principal.

Tax Credits Available

Home Buyers’ Amount

• $5,000 credit at tax time (worth $750)

Multigenerational Home Renovation Tax Credit (MHRTC)

• 15% credit on renovations (up to $50,000)

• Max refund: $7,500

Home Accessibility Tax Credit (HATC)

• Claim up to $20,000 in costs for modifications

These are refundable or non-refundable credits depending on your personal tax situation and can be claimed the year renovations are completed.

Common Pitfalls to Avoid

• Skipping FHSA thinking RRSP is enough

• Not applying early for limited local programs

• Buying new construction but forgetting to apply for GST/HST rebates

• Choosing a lawyer unfamiliar with first-time buyer rebates

• Underestimating closing costs (budget 2–3% of purchase price)

Case Study: 2025 First-Time Buyer in Ottawa

Profile:

• Name: Ayesha, age 29

• Occupation: Marketing analyst

• Income: $92,000

• Property: $530,000 new-build condo in Kanata

• Used:

  • FHSA ($32,000 saved)

  • HBP ($20,000 withdrawn)

  • Ontario land transfer tax refund ($4,000)

  • HBTC ($750)

Total savings: ~$56,750 Down payment required: ~$26,500 Actual out-of-pocket (after rebates): ~$3,500

Without these programs, Ayesha would have needed close to $30,000. With layered incentives, she was able to buy a home with far less up-front.

Full Buying Timeline for First-Time Buyers

1. Open FHSA as soon as possible

2. Get mortgage pre-approval and rate lock

3. Budget for all fees and taxes

4. Hire a real estate agent with first-time buyer experience

5. Shop for homes within your loan pre-approval range

6. Make offer, negotiate, and place deposit

7. Work with a lawyer to file all rebate forms

8. Close, sign, and receive keys

Your real estate lawyer will handle land transfer tax filings, rebate claims, and title registration. You’ll typically pay legal fees of $1,500–$2,200 plus disbursements.