Rebates for First Time Home Buyers in Ottawa, 2023: With John Haddad

May 2

If you’re looking to purchase your first home in Ottawa, there are plenty of rebates you can get from the Canadian government that incentivize your purchase in Ottawa or Ontario more generally!

We spoke with John Haddad about the best options for first time buyers in Ottawa.

Ontario First-Time Home Buyer Incentive (FTHBI)

The Ontario First-Time Home Buyer Incentive is a great option for first time home buyers in Ottawa. This is a shared-equity mortgage with the Government of Canada. Recipients of this incentive will receive the chance to pay a smaller down payment than the average home buyer. This will depend on the type of home you are looking at.

If the home you are interested in is a newly constructed home, you will have the chance to pay only 5 or 10% down. If the home had a previous owner, or is a mobile/manufactured home, your down payment will be 5%.

A shared-equity mortgage with the Government of Canada means that the government will have shared equity in your home. Over time, you repay the incentive that you received - so 5 or 10%. You must repay this amount after 25 years, or, when you sell the home - whichever comes first. There are no prepayment penalties.

This incentive is ideal for first time home buyers in Ottawa who may otherwise not be able to purchase a home for the full down payment amount. However, it is important to note that the less your down payment is, the more you have to pay back on a monthly basis. Larger down payments lead to smaller monthly payments.

The home owner will have to repay the government’s incentive back at the market value of the home in the current market (at the time of repayment) - the government has shared equity, meaning that it will also be responsible for any losses (up to 8%) should the market have dropped at that time.

The Home Buyer’s Plan (HBP)

The Home Buyer’s Plan, also known as the HBP, is another way for first time home buyer’s to make their first purchase in Ottawa easier. This plan allows you to withdraw up to $35,000 from your RRSP towards a down payment on a home, and you can repay it over a 15 year period. To qualify for it, you must be a first time home buyer in Canada and have a written agreement to buy or build a qualifying home. You must be a Canadian Resident through the entire process, and you must intend to use the home as your primary residence (and live in it within a year of it being bought or built).

The CRA’s Home Buyer’s Plan also has special exceptions for what is considered a first time home buyer - there is a 4 year period in which you may become eligible to take this money out of your RRSP again in the future. This will be something to explore with a financial advisor further.

Land Transfer Tax Refund

The Land Transfer Tax Refund means that you can get up to $4000 back on your first home purchase, as long as the home is worth more than $368,000. It applies only to buyers over the age of 18 who have yet to own a home or a stake in one (including inherited homes), and you will receive a refund on all the land transfer tax paid after the first $368,000 up to a maximum of $4000. There are limitations, for example, if one of the home purchasers were not a first time home buyer (reduces the money returns by the percentage of ownership of the other buyer), and others.

Taxpayers who qualify can claim a refund by registering electronically or by paper.