After years of pandemic-fueled price increases, we have now moved into a “buyer’s market” with active listings at their highest point in years and a softening in average prices. Combining this with the federal government’s renewed focus on making housing more affordable for Canadians, there is increased optimism in the real estate market for would-be homeowners.
In addition to lowering interest rates, Ontario homebuyers have access to a range of government-backed and local programs designed to make homeownership more attainable. These incentives target both first-time buyers and those with specific financial needs, offering tax credits, rebates, and innovative savings plans.
Key Provincial and Federal Incentives
- Home Buyers’ Amount: First-time buyers can claim a non-refundable tax credit of up to $1,500. Eligibility requires that neither the buyer nor their spouse has owned a home in the previous four years, with exceptions for those eligible for the Disability Tax Credit.
- Home Buyers’ Plan (HBP): This federal program allows first-time buyers to withdraw up to $60,000 from their RRSPs tax-free for a home purchase, with a 15-year repayment schedule.
- Ontario Land Transfer Tax Refund: Qualifying first-time buyers can receive a refund of up to $4,000 on the Ontario portion of land transfer tax, significantly reducing closing costs.
- GST/HST New Housing Rebate: Buyers of new homes may be eligible for a rebate on the federal and provincial portions of GST/HST, helping offset the cost of new construction or significant renovations.In addition, the federal government has just tabled a new GST rebate for first-time homebuyers of newly built homes of up to $50,000. This includes a full 5% GST rebate on homes up to $1 million and a partial rebate on homes between $1 million and $1.5 million.
- First Home Savings Account (FHSA): This account lets buyers contribute up to $8,000 annually (lifetime maximum $40,000), with contributions deductible from taxable income and withdrawals tax-free when used for a home purchase.
Local Programs in the Waterloo Region
Affordable Home Ownership (AHO) Program
Unique to the Waterloo Region, the AHO program provides interest-free, forgivable loans for down payments. The program targets low- to moderate-income households and is not restricted to first-time buyers.
Eligible applicants can receive a loan of 5% of the home’s purchase price (up to $24,000 for a $480,000 home). The loan can be combined with the buyer’s own savings for a maximum down payment of up to 20%. The program applies to both new and resale homes and is subject to a waiting list and funding availability.
Key Features of the AHO include:
- 5% down payment assistance (for eligible homes up to $480,000)
- No requirement to be a first-time buyer (income and housing need-based)
- Funds are provided as a forgivable loan, subject to occupancy and other conditions
- Recognized by CMHC as owner’s equity for mortgage qualification
Seller Incentives
While the majority of homeownership incentives are naturally focused on buyers, there are some incentives for sellers aimed at increasing the resale value of their homes. Sellers can take advantage of several programs and strategies to improve their property’s value and appeal:
Ontario Home Renovation Savings Program
Launched in 2025, this program offers rebates of up to 30% on energy-efficient home upgrades, including:
- Insulation
- Heat pumps
- Smart thermostats
- Solar panels
- ENERGY STAR® certified windows, doors, and water heaters
Homeowners can receive rebates for single upgrades or bundle multiple improvements for greater savings, with total rebates reaching up to $12,000, depending on the scope of work. These upgrades not only reduce monthly energy bills but also make homes more attractive to buyers, potentially commanding higher resale prices.
Other High-ROI Improvements
- Home Staging and Renovations: Strategic renovations, such as kitchen or bathroom updates, fresh paint, and modern flooring, can significantly boost resale value. Professional staging helps buyers visualize living in the space, often leading to faster sales and higher offers.
- Appliance Upgrades: Installing energy-efficient appliances is a practical way to increase a home’s value and appeal to environmentally conscious buyers.
Ontario and the Waterloo Region offer a variety of robust incentives for homebuyers, from substantial tax credits and down payment assistance to innovative savings plans. Combined with greater supply, softer prices and lower borrowing costs, we have some of the most favourable conditions in years for homebuyers.
Sellers can also benefit from provincial programs that subsidize energy efficiency upgrades, making their homes more valuable and marketable. Both buyers and sellers are encouraged to consult local experts to maximize the benefits of these evolving programs.
