The First-Time Home Buyer Incentive (FTHBI) was a Canadian federal government shared equity program launched in September 2019 that was officially discontinued on March 21, 2024. No new applications are being accepted. If you are researching the FTHBI as a potential resource for your home purchase, it is no longer available. This guide explains what the program was, why it was cancelled, and what first-time buyer programs remain available today.
The FTHBI was a shared equity mortgage program operated by CMHC (Canada Mortgage and Housing Corporation). Under the program, the federal government contributed 5% or 10% toward the purchase price of a qualifying first home in exchange for a proportionate share of the property's future equity. Buyers then held a smaller mortgage, which reduced monthly payments.
The government's equity stake would be repaid when the home was sold or after 25 years, whichever came first — at the property's current market value at that time, not the original contribution amount. If the home appreciated, the government received more; if it declined, the government received less.
The incentive amounts were:
For example, on a $400,000 home, the government contributed $20,000 (5%). Your mortgage was then $380,000 instead of $400,000, reducing monthly payments. The government owned 5% equity in your home. When you sold for $500,000, you owed back 5% of $500,000 = $25,000 (not $20,000 — the government participates in the appreciation).
The FTHBI was discontinued for several interconnected reasons:
Participation was far lower than government projections. Many buyers found the terms complex and the income and price caps too restrictive. The program's bureaucratic requirements deterred many eligible applicants.
The original income cap of $120,000 household income (later raised for some cities) and the maximum purchase price limitation meant many buyers in expensive markets like Toronto and Vancouver were entirely excluded. The cities where affordability was most challenging were precisely the markets where the program offered the least help.
Giving up a percentage of future equity to reduce current monthly payments was not financially attractive to most buyers who could reasonably expect their home to appreciate significantly. In markets with strong appreciation, buyers who accepted the incentive effectively sold government equity at below-market terms. Many real estate professionals advised against the program for this reason.
The First Home Savings Account (FHSA), introduced in 2023, offered a more straightforward and genuinely powerful benefit: tax-deductible contributions and tax-free withdrawals with no equity sharing. The FHSA made the FTHBI's complex equity-sharing model look unattractive by comparison.
While the FTHBI is gone, several strong programs remain:
The best program for first-time buyers. Contribute up to $8,000/year ($40,000 lifetime). Contributions are tax-deductible and qualifying withdrawals are permanently tax-free. No shared equity, no repayment required. Available to any eligible first-time buyer with earned income.
Withdraw up to $35,000 per person ($70,000 per couple) from your RRSP tax-free for a first home purchase. Must be repaid over 15 years or the amounts become taxable income. Still one of the most commonly used first-time buyer tools in Canada.
A non-refundable federal tax credit of $100 (the "home buyer's amount") for qualifying first home purchases, worth up to $1,500 in federal tax savings. Provincial equivalents exist in some provinces. This credit applies to the year you purchase and does not require any application beyond claiming it on your tax return.
If purchasing a new construction home or substantially renovated home, you may qualify for a partial rebate of GST or HST paid on the purchase price. For homes below $450,000 (federal portion), a partial rebate applies. Provincial rebates vary. Applied through CRA after purchase.
First-time buyers in Ontario and British Columbia receive partial rebates of provincial land transfer taxes. Toronto has an additional municipal land transfer tax with a separate first-time buyer rebate. These rebates can total $4,000–$8,000 depending on purchase price and province.
As of August 2024, first-time buyers purchasing new builds can access insured mortgages with 30-year amortizations (previously limited to 25 years for insured mortgages). This reduces monthly payments by approximately 8%, improving cash flow and qualifying ability.
If you participated in the FTHBI before the March 2024 cancellation, your existing agreement remains in force. You still owe the government the proportionate equity share when you sell or at the 25-year mark. Existing participants can contact CMHC for questions about their specific incentive agreement.
The FTHBI's failure offers lessons for future policy. Shared equity programs appear beneficial on the surface — less mortgage, lower payments — but the equity-sharing mechanism means you partially sell future appreciation of your home to access current affordability. In appreciating markets, this is an expensive trade-off. Tax-advantaged savings programs (like the FHSA) that let buyers save and access funds without strings attached tend to be more beneficial and more widely used.
If future governments introduce new shared equity programs, evaluate them with this lens: what is the true cost of the equity you are sharing, based on reasonable assumptions about your market's appreciation over the life of the agreement?
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