Tax Credits, Grants, Rebates and Programs Available for First-Time Homebuyers

With tax season just around the corner it’s a good idea to become familiar with the tax credits, rebates, grants and programs you can apply for. Here are some of the programs, rebates and tax credits available to first-time homebuyers: Home Buyer Tax Credit (HBTC), RRSP Home Buyers Plan, Ontario Land Transfer Tax Credit and 0% Down Mortgages (via 5% cash back mortgages).

Home Buyers Tax Credit (up to $750): you can receive up to $750 back from the federal government by applying for the home buyer tax credit in the year your home was purchased. To obtain the tax credit, complete line 369 on your personal income tax. You will qualify for the HBTC if:

  • You, your spouse or common-law partner acquired a qualifying home; and
  • You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or any of the four preceding years.

If you buy a house, with a spouse or common-law partner, either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750. You must occupy the home as a principle residence no later than one year after the home was purchased.

First Time Home Buyers RRSP Plan (up to $25,000): the First Time Home Buyers RRSP Plan (HBP) allows first-time homebuyers to withdraw up to $25,000 from RRSPs to buy or build a home for yourself or for a related person with a disability. The withdrawn amount must be repaid within 15 years, subject to a minimum annual repayment that is 1/15 of the amount withdrawn. If the full $25,000 is withdrawn, the minimum annual repayment is $1,667. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer’s income. To qualify for the Home Buyers Plan, an individual must have not owned a home during the last 4 full calendar years.

First Time Home Buyers Ontario Land Transfer Tax Credit (up to $2,000): the Land Transfer Tax Credit is a refund of the cost of the provinces land transfer tax up to a maximum of $2,000. This will allow first-time homebuyers to purchase a home up to $227,500 without having to pay any land transfer fee. Any amount higher than $227,500 is taxed a rate of approximately 1.5%. To qualify the property must be owner occupied. The first time home purchaser may claim the full maximum amount or a portion of the maximum refund amount. To qualify for the Land Transfer Tax Credit, you cannot have ever owned a home, or an interest in a home, anywhere in the world. The refund can be given instantly at your lawyer’s office but you need to advise the lawyer prior to the closing date if you qualify for the rebate.

Rebate Examples

Cost Of Home

Tax Payable

Tax Rebate










The refund amount is reduced when one or more transferees are not a first time homebuyer. The reduction will be proportionate to the interest in land acquired by the individuals who are first time home purchasers. For example, a parent who is not a first time home buyer and their child who is a first time home purchaser, purchase a home with equal 50/50 interests, the child may claim 50% of the land transfer fund. The child’s claim cannot exceed the 50% of the maximum allowable refund, ex. 50% of $2,000.

‘0%’ Down Payment: although a no money down mortgage (0% down payment) is no longer available, there are still ways to obtain an insured mortgage with no money down. Here are some options that are available:

  • 5% down mortgage with a 5% cash back component.
  • The Canadian Mortgage and Housing Corporation (CMHC) permits down payments to come from borrowed sources (credit cards, line of credit, and family) provided that this is disclosed to the lender.

A homebuyer can borrow their down payment and obtain a 5% cash back mortgage. Once the home closes the buyer can pay off the borrow money with the cash back. 5% cash back mortgages will usually carry a premium charge of 1.5% or higher. The borrowed money must be in your bank account or liquid savings vehicle for 90 days prior to submitting a mortgage approval.


Eti Pricope
Sales Representative

CENTURY 21 Miller Real Estate Ltd. 
Brokerage Independently Owned and Operated 
#4 Office in Canada
By Production CENTURY 21 Canada 2013
467 Speers Road, Oakville, ON L6K 3S4

Cell:       647.923.7576
Office:   905.845.9180








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