The First-Time Home Buyer Incentive Has Ended: What First-Time Buyers Can Use Instead

Buying your first home in Canada can feel confusing and stressful. You’re excited, but you might also be thinking, “Can I really afford this?” or “Where do I start?” Many first-time home buyers find the process hard to understand. That’s why the First-Time Home Buyer Incentive was created to make things easier. And with support from Fusion Mortgage Group, the entire process can be clearer and more manageable.

I’ve worked with new homeowners across Ontario, and I’ve seen firsthand how confusing the process can be without the right support. With programs like the First-Time Home Buyer Incentive Canada, you get a real financial boost that can help you open the door to your first property, without drowning in debt.

In this blog, we’ll break down everything you need to know in a simple, direct way. You’ll learn how the incentive works, how to qualify, and how to apply step-by-step with Fusion Mortgage Group by your side. 

What First-Time Buyers Can Use Instead

The incentive is gone, but the programs that tend to matter more are still here.

• First Home Savings Account (FHSA). Contributions are tax deductible and qualifying withdrawals are tax free. For most first-time buyers this is the single most valuable account available.
• Home Buyers’ Plan (HBP). You can withdraw up to $60,000 from an RRSP toward a first home, repayable over time. Confirm the current rules and when repayment begins with the Canada Revenue Agency.
• 30-year amortization on insured mortgages. Available to eligible first-time buyers, which lowers the monthly payment. Eligibility is not universal, so confirm it applies to you before planning around it.
• First-Time Home Buyers’ Tax Credit. Still available, and claimed on your tax return rather than applied for in advance.

Which of these actually helps depends on your income, your down payment and the property. That is a conversation rather than a checklist, and it is one we have most weeks.

What the First-Time Home Buyer Incentive Was

The First-Time Home Buyer Incentive is a federal program offered by the Government of Canada to help make homeownership more affordable. It’s not a grant or a traditional loan. Instead, it’s a shared equity mortgage. This means the government invests in your home by contributing part of your down payment in exchange for a share in the home’s future value.

Here’s how it works:

• You can receive 5 percent of the purchase price of a resale home, or
• 5 or 10 percent of the purchase price for a newly constructed home.

This lowers your monthly mortgage payments without adding to your financial burden. The best part is you don’t have to pay monthly interest or make ongoing payments on the incentive. Repayment only happens when you sell your home or after 25 years, whichever comes first.

If you’re a first-time home buyer in Ontario, this can be a game changer. And yes, first time home buyer incentive Ontario and first time home buyer incentive Canada both follow the same core rules, though provincial and municipal programs may offer additional support.

More: Is It Better to Use a Mortgage Broker or Bank in Canada?

Who Qualified for the Incentive

Qualifying for the incentive isn’t overly complex, but there are key criteria you need to meet:

• You must be a first-time home buyer, meaning:
  • You’ve never purchased a home before, or
  • You haven’t lived in a home owned by you or your spouse in the last four years, or
  • You’ve recently gone through a breakdown of a marriage or common-law partnership.
• Your annual household income must be $120,000 or less.
  • In high-cost cities like Toronto, Vancouver, or Victoria, this limit goes up to $150,000.
• Your total borrowing amount (including the incentive) can’t exceed 4 times your qualifying income. In higher-cost regions, this ratio is increased to 4.5 times your income.
• You must have the minimum down payment (5 percent of the purchase price) from your own savings or eligible sources.
• The property must be in Canada and be your primary residence.

If you’re buying in Ontario, these criteria apply just the same. But you may also qualify for other Ontario-based first-time buyer benefits. Fusion Mortgage Group can help you explore those options, too.

What Other Government Programs Existed Alongside It

The First-Time Home Buyer Incentive is just one piece of the puzzle. The federal government offers a few other programs that can stack up to major savings:

1. Home Buyers’ Plan (HBP)

The Home Buyers’ Plan (HBP) is a program that lets you withdraw up to $60,000 (as of 2024) from your Registered Retirement Savings Plan (RRSP) to help buy or build a qualifying home. The best part? The withdrawal is tax-free, as long as you repay it over a 15-year period.

You can use the HBP to buy a home for yourself or to help buy or build a home for a specified disabled person, such as a relative.

It’s also possible to combine the HBP with a First Home Savings Account (FHSA). As long as you meet all the conditions for both programs at the time of each withdrawal, you can withdraw from both your RRSP under the HBP and your FHSA for the same qualifying home.

To learn more about the FHSA, visit the official government page on the First Home Savings Account (FHSA).

2. First Home Savings Account (FHSA)

A new registered savings account allowing you to contribute up to $8,000 per year, to a maximum of $40,000. The contributions are tax-deductible and withdrawals are tax-free when used to buy your first home.

3. GST/HST New Housing Rebate

If you buy a newly built home or do substantial renovations, you may be eligible for a partial refund of the GST or HST.

All of these can be combined with the Canada first time home buyer incentive, and your mortgage broker can help you take advantage of the ones you qualify for.

How Do I Claim the Tax Credit for First Time Home Buyers in Canada?

The First-Time Home Buyers’ Tax Credit (HBTC) offers a non-refundable tax credit of $10,000 (as of the 2023 tax year). This can result in a tax refund of up to $1,500 when you file your return.

Here’s how to claim it:

• On your personal income tax return, enter the amount on line 31270 of your Schedule 1.
• You can split the credit with your spouse or common-law partner, but the total combined claim cannot exceed $10,000.
• You must be a first-time home buyer and have purchased a qualifying home in the tax year.

It’s a simple step that can put real money back in your pocket. Fusion Mortgage Group reminds all clients during the closing process to take advantage of this, and we can walk you through what documentation you’ll need when it’s tax time.

How the Application Worked, Step by Step

• Step 1: Check Your Eligibility

Before you do anything else, verify if you meet the criteria we mentioned earlier. Fusion Mortgage Group can help you evaluate your income, down payment amount, and borrowing capacity to confirm you qualify.

• Step 2: Get Pre-Approved by Fusion Mortgage Group

Next, get pre-approved for a mortgage. At Fusion Mortgage Group, we work with multiple lenders, including big banks, credit unions, and monoline lenders. This gives you more flexibility and better rates. We’ll also ensure your pre-approval meets the program’s guidelines so there are no surprises.

• Step 3: Gather Your Required Documents

You’ll need a few documents to move forward, including:

• Proof of income (pay stubs, T4s, NOAs)
• Identification
• Proof of down payment (bank statements, RRSP withdrawal confirmation)
• Purchase and Sale Agreement once you find your home

We’ll give you a checklist and help you stay organized every step of the way.

• Step 4: Submit the Application for the Incentive

After your offer on a home is accepted, you’ll submit an application to the Canada Mortgage and Housing Corporation (CMHC) or the program administrator. We will guide you through this, helping you fill out the forms and ensuring your documents are accurate.

• Step 5: Close the Deal and Move In

Once approved, the incentive funds will be advanced on closing day and applied directly to your down payment. You’ll sign a shared equity mortgage agreement with the government, and you’re good to go! Time to grab your keys and move in.

Who counts as a first-time buyer

For most federal programs you are a first-time buyer if neither you nor your spouse or common-law partner has lived in a home you owned in the previous four years. There are exceptions for people with a disability and for those whose marriage or common-law relationship has broken down, which is why a separation can reopen first-time buyer benefits.

Two more things Ontario first-time buyers should know

The Ontario land transfer tax refund. First-time buyers can claim a refund of up to 4,000 dollars against provincial land transfer tax, claimed at closing through your lawyer. Toronto buyers get a separate municipal refund on top.

Mortgage default insurance. With a down payment between 5 and 20 percent, the mortgage must be insured through CMHC, Sagen or Canada Guaranty. The premium protects the lender, not you, but it is what makes a 5 percent down payment possible at all, and it is usually added to the mortgage rather than paid up front.

Why Choose Fusion Mortgage Group

When you’re a first-time home buyer, you don’t need more confusion. You need clear answers, fast action, and expert guidance. That’s exactly what we deliver.

• Personalized Mortgage Guidance

Unlike bankers who work for the bank and are often driven by sales targets and bonuses, I work for you. My goal is to keep more money in your pocket by finding the best mortgage solution, not what benefits the lender. With access to monoline lenders, credit unions, private lenders, and even major banks, you’re never stuck with just one option.

We take your full financial picture into account, ensuring that the first time home buyer incentive Ontario or nationwide works for your unique situation.

• Assistance with Government Forms and Requirements

From the first phone call to the final signature, I’m with you every step of the way. That includes the federal incentive, applying for the First Home Savings Account, or claiming your tax credits. We make the process stress-free and straightforward.

• Simple Pre-Approval and Application Process

Everything is digital, fast, and efficient. We don’t send you on wild goose chases. We get your documents in order, contact lenders, and ensure your pre-approval and application meet the criteria for the first time home buyer incentive Canada program. You’ll never feel like you’re doing it alone.

Let Us Help You Secure Your First Home

I’ve worked with first-time home buyers across Ontario to help them take advantage of programs like the First-Time Home Buyer Incentive. Every situation is different. Your goals are unique, and your plan should reflect that.

Here’s the good news: You don’t pay me anything. My services are 100 percent free to you. I’m paid by the lender, not by you. That means you get expert advice, full support, and personalized mortgage solutions.

Whether you’re just starting to dream about buying a home or you’re ready to take the plunge, I’m here to make sure you do it the smart way. Call 289-723-2126 to schedule your consultation today. Let’s open the door to your first home, together.