Canadian Home Down Payment Assistance Programs

1. First-Time Home Buyer Incentive (FTHBI)

What it is: A shared-equity mortgage with the Government of Canada. The government provides 5% or 10% of the home’s purchase price, depending on whether it’s a resale or newly constructed home.

How it helps with the down payment: This “shared equity” portion can lower your total mortgage amount, reducing monthly payments and easing the financial burden of a large down payment.

Key points:

• Only for first-time home buyers (or those who haven’t owned a home in the past four years, with exceptions).
• Household income must be below a specific threshold (often around $120,000 - $150,000).
• The government shares in appreciation or depreciation. If you sell, or after 25 years, you repay the incentive plus/minus proportional gains/losses.

Official Website: First-Time Home Buyer Incentive

2. Home Buyers’ Plan (HBP)

What it is: A federal program allowing first-time buyers to withdraw up to $35,000 from a Registered Retirement Savings Plan (RRSP) for a down payment without immediate tax consequences.

How it helps with the down payment: You can leverage your RRSP savings immediately, provided you follow the repayment rules.

Key points:

• Must qualify as a “first-time home buyer” under CRA guidelines (or be purchasing for a disabled person).
• Up to 15 years to repay the withdrawn amount back into your RRSP.
• No withholding tax is taken if you abide by HBP regulations.

Official Website: CRA - Home Buyers’ Plan

3. First Home Savings Account (FHSA)

What it is: A new account type (launched in 2023) that combines tax advantages of an RRSP and a TFSA specifically to help Canadians save for their first home.

How it helps with the down payment: Contributions are tax-deductible (like an RRSP), and withdrawals (including gains) for a first home are tax-free (like a TFSA). Annual contribution limit is $8,000, with a lifetime cap of $40,000.

Key points:

• Must meet the government’s definition of a “first-time home buyer.”
• Unused contribution room can be carried forward.
• If you don’t buy a qualifying home, you can transfer funds to your RRSP or RRIF without penalty (though RRSP/RRIF rules then apply).

Official Website: Government of Canada - First Home Savings Account

4. Provincial and Municipal Down Payment Assistance Programs

Many provinces and municipalities offer specific down payment assistance programs, typically for low- or moderate-income households. These can be grants, forgivable loans, or low-interest loans. Programs vary by region.

Examples by Province

Key points about provincial/municipal programs:

• Often have income caps and may require homebuyer education courses.
• Financial assistance can be grants or loans (sometimes forgivable after a set occupancy period).

5. Other Notable Federal Supports

GST/HST New Housing Rebate

If you buy a new construction home or substantially renovate an existing home, you may qualify for a rebate on the GST or HST paid. This effectively reduces your overall costs, though it’s not a direct down payment program.

First-Time Home Buyers’ Tax Credit (HBTC)

This is a non-refundable federal tax credit that provides modest tax relief in the year you purchase your first home. While not “cash-in-hand” toward your down payment, it can help offset closing costs once you file your tax return.