First-Time Home Buyer Guide Ontario 2025

Q: Can I claim both the Ontario and Toronto LTT rebates?

Yes — if buying in the City of Toronto, you pay both provincial and municipal LTT, and you're eligible for both rebates. Your lawyer handles both at closing.

Q: Do I need to be a Canadian citizen?

You must be a Canadian citizen or permanent resident. Some programs also apply to certain non-resident categories.

Q: What if I owned a home before but not recently?

For most federal programs, you qualify if you haven't lived in a home you owned in the past 4 years. Ontario LTT rebate requires you to have never owned a home anywhere in the world, or be buying with a qualifying co-buyer.

Ontario is Canada's most expensive housing market for first-time buyers, but also one with the strongest set of rebates and programs. This guide covers everything Ontario first-time buyers need — from LTT rebates to the Toronto municipal tax refund, FHSA, stress test, and the complete buying process.

Ontario First-Time Buyer Programs at a Glance

Program	Benefit	Value
Ontario LTT First-Time Buyer Rebate	Refund on Ontario land transfer tax	Up to $4,000
Toronto Municipal LTT Rebate	Refund on Toronto land transfer tax	Up to $4,475
FHSA (federal)	Tax-free savings for home purchase	$40,000 lifetime
RRSP Home Buyers' Plan (federal)	Withdraw RRSP for down payment	$35,000/person
Home Buyers' Amount (federal)	Federal tax credit	$1,500

Ontario Land Transfer Tax Rebate for First-Time Buyers

Ontario LTT First-Time Buyer Rebate: up to $4,000

Ontario charges a land transfer tax on all home purchases. First-time buyers get a full refund of LTT on homes up to $368,333. For homes above that, you receive a partial refund capped at $4,000.

How the rebate works:

Full refund on the first $368,333 of purchase price (LTT = $4,000)
No refund on LTT above $4,000 — you pay the excess yourself
Must be applied for at time of closing through your real estate lawyer

Ontario LTT Rates (2025)

Purchase Price	LTT Rate
First $55,000	0.5%
$55,001–$250,000	1.0%
$250,001–$400,000	1.5%
$400,001–$2,000,000	2.0%
Over $2,000,000	2.5%

For a $700,000 home, LTT is approximately $10,475. As a first-time buyer, you'd pay $10,475 minus the $4,000 rebate = $6,475 out of pocket.

Toronto Municipal Land Transfer Tax Rebate

If you're buying in the City of Toronto, you pay a second land transfer tax — the municipal LTT — on top of Ontario's LTT. First-time buyers also get a rebate on this: up to $4,475.

Toronto's municipal LTT uses identical rates to Ontario's. For a $700,000 home, you'd owe approximately another $10,475 in municipal LTT. The first-time buyer rebate covers up to $4,475 of that.

Combined Toronto + Ontario rebate for a first-time buyer: up to $8,475.

Combined rebate example: A couple buying a $900,000 condo in Toronto. Each qualifies as a first-time buyer. Ontario LTT = ~$16,475; Toronto LTT = ~$16,475. Each partner claims the Ontario ($4,000) and Toronto ($4,475) rebates for a combined savings of $16,950 on transfer taxes alone.

FHSA for Ontario Buyers

The First Home Savings Account is a federal program available to all Canadian first-time buyers, including Ontario residents. Key details for 2025:

Contribute up to $8,000/year, maximum $40,000 lifetime
Contributions are tax-deductible
Withdrawals for qualifying home purchase are tax-free
Can carry forward up to $8,000 in unused room from prior year
Available at major banks (TD, RBC, Scotiabank, BMO, CIBC) and online brokers

For Ontario buyers with high provincial income tax rates (up to 53.53% combined), the FHSA tax deduction is extremely valuable. A $8,000 contribution at a 40% marginal rate returns $3,200 on your tax return.

RRSP Home Buyers' Plan in Ontario

Ontario first-time buyers can combine the RRSP HBP with the FHSA. Withdraw up to $35,000 per person ($70,000 per couple) from your RRSP for a home down payment. Rules:

Must have lived in Canada when you buy
RRSP funds must have been in the account for at least 90 days before withdrawal
Repay over 15 years (starting 2 years after the year of withdrawal)
Annual repayment = 1/15 of amount withdrawn

Ontario Home Prices and What You Need

Ontario housing markets vary dramatically. Here's what minimum down payments look like across the province:

City	Avg Price (2025)	Min Down Payment	CMHC Premium
Toronto	~$1,150,000	20% ($230,000)	N/A (over $1M)
Ottawa	~$600,000	7.5% ($45,000)	~$17,100
Hamilton	~$740,000	12% ($88,800)	~$26,400
London	~$580,000	8% ($46,400)	~$18,200
Kingston	~$490,000	5% ($24,500)	~$14,500

Ontario Mortgage Stress Test 2025

All Ontario mortgage applicants must pass the stress test: qualify at your contract rate + 2% OR the Bank of Canada's 5-year benchmark rate, whichever is higher. This reduces your maximum qualifying amount. Factor this into your home search.

Ontario New Home Warranty (Tarion)

If buying a new construction home in Ontario, you're protected by Tarion warranty: 1-year workmanship warranty, 2-year systems warranty, and 7-year structural warranty. New homes also qualify for HST New Housing Rebate — important cost savings for buyers.

The Ontario First-Time Buyer Process

Open FHSA and start contributing immediately
Build credit score to 680+ (lenders prefer higher)
Get mortgage pre-approval (compare multiple lenders)
Hire a buyer's real estate agent (free to buyer)
Search MLS listings on Realtor.ca or Housesigma
Make offers with appropriate conditions
Book home inspection ($400–$600)
Retain a real estate lawyer ($1,800–$2,500 in Ontario)
Claim LTT rebates through lawyer at closing
File Home Buyers' Amount on tax return

Closing Costs for Ontario First-Time Buyers

Ontario LTT (after rebate): varies
Toronto municipal LTT (after rebate, if applicable): varies
Legal fees: $1,800–$2,500
Title insurance: $250–$450
Home inspection: $400–$600
Title search and registration: $300–$500
Property tax adjustment: 1–2 months prorated
CMHC insurance (if <20% down): 2.8–4%

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Ontario First-Time Buyer FAQs

Can I claim both the Ontario and Toronto LTT rebates?

Yes — if buying in the City of Toronto, you pay both provincial and municipal LTT, and you're eligible for both rebates. Your lawyer handles both at closing.

Do I need to be a Canadian citizen?

You must be a Canadian citizen or permanent resident. Some programs also apply to certain non-resident categories.

What if I owned a home before but not recently?

For most federal programs, you qualify if you haven't lived in a home you owned in the past 4 years. Ontario LTT rebate requires you to have never owned a home anywhere in the world, or be buying with a qualifying co-buyer.