New Incentives for First-Time Buyers

Buying a home in the Greater Toronto Area just got easier. Changes to the federal First-Time Home Buyer Incentive (FTHBI) lift the maximum you can pay for your first ever home to $722,000.

New borrowers who didn’t qualify in past can participate. And now the FTHBI cap has gone up, condos, resale homes outside Toronto proper and new build co-op housing shares are even more within your reach.

When you find the home you’re looking for, Axess Law helps you finalize your first home purchase. We close real estate transactions quickly and for a lot less than you’d expect.

How the Incentive Works

If you’re new to owning a home, the FTHBI gives you a helping hand with a mortgage down payment. You get an interest-free, federal shared equity mortgage of 5% to 10% of your home’s value, without any repayment required until you sell your home. No monthly payments or extra fees are added on.

Buyers can borrow:

  • 5% for resale homes
  • 5% or 10% for new builds
  • or 5% for new or resale mobile or manufactured homes. 

Your new home can be single family or semi-detached, a duplex, triplex or four-plex, townhouse, condo, mobile or manufactured home. 

You contribute the minimum qualifying down payment — 5% to 10% for high ratio, insured mortgages from CMHC, Sagen or Canada Guarantee. The shared equity mortgage contributes the rest.


What First Time Buyers (Ontario) Get

What you get for your investment is mortgage interest savings, by using someone else’s money to top up your down payment. Plus, you can put more down, making you more attractive to mortgage lenders, who like the fact you have more equity in your home.

In return, you can either pay back the loan in full after 25 years or never make a payment until you sell your home, buy out a co-owner or port your mortgage to a new property.

If your home goes up in value, the amount you owe increases. For example, if you borrowed 5% but your home increases by 10%, you owe the FTHBI more based on your home’s new market value. If property values dip, your indebtedness goes down with it. 


You borrow 5% or $24,000 to buy a $480,000 home

Your home goes up in value by 10% to $576,000 

You owe 5% of the new value of $576,000 ($28,800) 

Instead of 5% of $480,000 ($24,000) 

Increase in amount owed = $4,800


What’s Changed for First-time Buyers 

New to the incentive is an expanded ceiling for who qualifies. Singles or families with household incomes of up to $150,000 annually can now borrow from FTHBI. That’s a leap of $30,000 from the previous ceiling of $120,000. 

Maximum home prices are 4.5 times annual income, an increase from 4 times in past. And, you can now buy a home worth up to $722,000 (including down payments), compared to $505,000 in past. 

With the extra down payment, buyers can borrow more for a new home. As the amount they owe decreases, their interest payments go down.

You May Qualify 

Check it out before you sign an agreement of purchase and sale in Ontario. If you:

  • have never purchased a home before
  • or have not occupied a home you or your spouse or common law partner owned for the past four or more years
  • or you have had a recent marriage or common law relationship breakdown
  • are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada
  • have the minimum down payment from savings, a RRSP or a non-repayable financial gift from a relative or immediate family member

you may qualify. Ask us if you have questions about closing a home purchase. We have a real estate lawyer (Toronto area or Ottawa) who can liaise with your lender to organize your mortgages.


More Financial Aid for First-time Buyers

That’s not the only incentive for first-time buyers.

  • Withdraw a down payment from your RRSP and defer taxes for up to 15 years. Canada’s Home Buyers’ Plan lets you use RRSP savings to make a down payment of up to $35,000. You and your spouse can each withdraw the maximum to buy or build a principal residence. You can even get a self-directed RRSP mortgage.
  • Get a non-refundable income tax credit of up to $750 through the first time home buyer tax credit for Ontario. The credit covers legal fees, disbursements and land transfer taxes.
  • Ontario and Toronto offer first time home buyer land transfer tax rebates (some exceptions apply), up to $4,000 for the provincial rebate and $4,475 in Toronto. 
  • Buying or building a new home could make you eligible for a federal HST rebate or provincial rebate (for homes valued over $450,000). New home purchasers pay 13% tax when they buy from builders or build or renovate their own home. 

Besides conventional homes, mobile or floating homes (but not houseboats), homes on leased land or shares in newly built co-ops all qualify for rebates. 

A tip for first-time buyers: costs involved in buying or building a home are subject to HST. Factor it in for real estate commissions, survey costs, home inspections, mortgage appraisals, legal fees and disbursements. The extra expense is part of preparing a real estate purchase agreement in Ontario.  


Why You Need a Lawyer

An Axess Law real estate lawyer in Ontario can search the title to your new property for liens, easements and land surveys. We register your home with the local land titles office and prep all your legal documents.

Our lawyers arrange signatures for mortgage insurance and mortgage documents with your bank, credit union or private lender. We answer your questions, like if a real estate deal falls through who gets the deposit and what is title insurance.  

When the deal is done, you receive a final statement of adjustments so you can be satisfied your real estate purchase is complete. Only a lawyer licensed with the Law Society of Ontario can prepare closing documents. Axess Law makes it easy and affordable.


Flat Fee Legal Services for Real Savings

Axess Law has flat rate real estate lawyer fees that make buying your first home cheaper. You pay just $999.99 and up to buy a home or condo and $649 to transfer title to a property. Our 

licensed legal professionals video conference online anywhere you are in Ontario. 

Book an Appointment Online or By Phone

Dial 1-647-479-0118 for a free quote on closing first-time home purchases or book appointments online. It’s fast and convenient. Axess Law locations have real estate lawyers near Greater Toronto Area and Ottawa. We can video conference online with you 7 days a week, day or evenings. Toll free calls are accepted at 1-877-402-4207. Try our onsite parking or take the transit to our nearest location.

Related Articles