Opening the Door to Your First Home: Incentives for First-Time Home Buyers
Posted By: Rachel Kavanagh
Are you a first-time homebuyer dreaming of owning your own home in York Region, Durham Region or Toronto, but unsure where to start? The journey to homeownership can seem daunting, but with the right information and resources, it can become a reality sooner than you think. Here are some key incentives and programs available to help first-time buyers find real estate within the vibrant communities of York Region, Durham Region and Toronto.
RRSP Home Buyers Program (HBP)
The RRSP Home Buyers’ Plan (HBP) has long been a valuable tool for first-time homebuyers. It allows eligible buyers to withdraw up to $60,000 from their RRSP to use toward the purchase of their first home without incurring tax penalties. This program provides significant assistance for those looking to buy a detached home, townhouse, or condo in Toronto, York Region or Durham Region. Additionally, it offers a flexible repayment period of up to 15 years, making it an accessible option for many.
30-Year Amortization for First Time Home Buyers
First-time buyers of all home types can now benefit from a 30-year amortization period. This extended period helps reduce monthly mortgage payments, making homeownership more affordable and attainable for all buyers of new builds and many first-time buyers searching for homes for sale in York Region, Durham Region and Toronto.
Increased Insured Mortgage Cap
The maximum property value eligible for an insured mortgage has been raised from $1 million to $1.5 million, effective December 15, 2024. This adjustment reflects current housing market realities, particularly in higher-priced regions, allowing more buyers to qualify for insured mortgages with lower down payments.
Deposits on Home Purchases
The rules for minimum down payments are as follows:
- 5% on the first $500,000 of the purchase price
- 10% on the portion between $500,000 and $1.5 million
For example, buying a $1.5-million home now requires a $125,000 down payment—much less than the $300,000 needed for uninsured mortgages under the old rules.
If the purchase is above $1.5 million then the minimum downpayment will be 20% of the purchase price.
Tax-Free Home Savings Account (FHSA)
The Tax-Free Home Savings Account (FHSA) is another excellent option for first-time buyers looking to save for a down payment on a home in York Region, Durham Region or the Greater Toronto Area. This savings account allows you to contribute up to $8,000 annually, with contributions being tax-deductible. Over time, these contributions can add up, helping you reach your down payment goal faster. In total, you can contribute up to $40,000 to your FHSA.
First Time Home Buyer Tax Credit (HBTC)
Both the provincial and federal governments offer tax credits for first-time homebuyers, providing additional savings during the homebuying process. These credits can be used in the year you purchase your home to reduce your taxes owed, potentially saving you up to $1,500 on qualifying purchases.
Land Transfer Tax Refund
In Ontario, first-time homebuyers are eligible to receive a refund of up to $4,000 on the provincial land transfer tax. This refund can help offset some of the upfront costs associated with buying a home, making it a valuable incentive for first-time buyers in the province.
First-Time Home Buyer Rebate LTT Toronto Only
For those looking to purchase a home in Toronto, there’s an additional incentive available. The First-Time Home Buyer Rebate for Toronto offers a rebate of $4,475 on the city’s land transfer tax, providing valuable savings for first-time buyers in the area.
Navigating the world of real estate as a first-time buyer can be overwhelming, but with these incentives and programs available, you can take the first steps towards homeownership with confidence. There are a wealth of resources available to help you achieve your homeownership dreams. For guidance and support throughout your first-time homebuying journey, contact the RE/MAX All-Stars Benczik Kavanagh Team. Our experienced professionals are ready to help you find your dream home and navigate the process with ease.
