If you are reading this article, there is a good chance you are thinking about, or perhaps you have made the decision to buy your first home. Firstly, let me say congratulations! Buying your first home is a big life step – and one of the largest investment decisions you’ll ever make.
You will not only be purchasing a house, you will be investing in a community, building a lifestyle, perhaps raising a family, and maintaining a house in accordance with municipal codes and bylaws. You will also be building equity through home ownership.
For all of these reasons, it’s important to work with an ethical and experienced rRaltor who knows the area you want to live in, and who will help prepare you with the right information to support a successful purchase. Since you have not purchased a home before, there are several programs and key steps that are unique to you as a first-time home buyer that I will take you through in this article.
The purchase of your first home begins with a vision and continues with a well-thought-out plan. Start your journey off right by downloading our Home Buying Guide.
Access to Government Incentives
Let’s start with the somewhat dry topic of incentives and tax credits. Don’t fall asleep on me, yet. To make this a little easier to follow, I will break these down into 5 total incentive programs, of which 4 are Federal and 1 is a Provincial Program. All are designed to financially assist and incentivize first-time home buyers:
First Home Savings Account
The Federal Government of Canada truly wants you to buy a home. To help all Canadians, they have created a program called the First Home Savings Account (FHSA). Hot tip: You will want to open one of these accounts as soon as possible. Here’s how it works:
Canadians can contribute up to $8000/year to this account to use towards the purchase of your first home. Bear in mind, there is a lifetime maximum of $40,000. The advantage of this program is that your contributions are tax-deductible (woohoo), and your withdrawals are tax-free (we don’t hear that too often). That makes this program essentially tax-free in and tax-free out. Go Canada!
A big part of buying a house is simply understanding what lies ahead. The posts below will give you some much-needed background:
- Difference Between a Buyers, Sellers, and Balanced Market
- How Property Valuation Works: A Complete Guide for Buyers, Sellers, and Investors
Home Buyer’s Plan
Next, let’s look at the Home Buyer’s Plan (HBP). This plan was created to allow Canadians to leverage their RRSP savings to buy a home. The government increased the strength of this plan in 2024. Under the Home Buyer’s Plan, you can now withdraw up to $60,000 from your RRSP without paying tax on it, and use it as a downpayment on a house. There is a repayment requirement, however, that starts in year 2 (effective Jan 1, 2026). The repayment period extends for a generous 15 years, allowing you to accomplish your homeownership dreams, increase your growing net-worth through real estate and build back your savings for future retirement. Thanks, Canada!
First Home Buyer’s Tax Credit
Because we can never say enough about taxes, let’s move on to the Home Buyers’ tax credit. This one is straightforward and we are just in time for tax filing season in Canada. This credit allows home buyers to claim a $1500 tax credit on your tax return, provided you have not owned a home in the preceding 4 years. Call your accountant! It’s as easy as that, thank you very much.
GST Exemption on New Homes
Our fourth federal program for home buyers is the newest one, having taken effect in March 2025. It’s called the GST Exemption on New Homes. Not a very catchy title, but it does exactly what it says, saves GST costs on newly constructed homes to aid and encourage home buyers to make their first purchase.
This program only applies to newly constructed or substantially renovated homes. It offers a GST exemption on homes that are equal to or less than $1m. Looking at the top of the range, on the purchase of a $1M home, you would save up to $50,000 in tax or 5% GST on your purchase. This program is available through the government of Canada through 2031.
Are you planning to buy a home or do you have questions about the process? Book a complimentary buyer’s consultation and get ready to talk strategy!
We’re Not Quite Finished Yet!
That’s a wrap on the federal programs available to you as a first-time home buyer, however, there is one more provincial program offered by the Government of Ontario that will further support you in the purchase of your first home. And we can never have too many tax rebates, right?
Ontario Land Transfer Tax Rebate
The province of Ontario now offers an incentive for first-time home buyers only, called the Ontario Land Transfer Tax Rebate (LTT Rebate). This tax rebate covers the full amount of the land transfer tax on homes purchased for up to $368,000.
The maximum rebate amount is $4000. If you purchase a home worth more than $368,000, you would simply claim the maximum rebate of $4000. The good news is, this LTT Rebate applies to both resale homes and new construction. You need to make the claim within 18 months of your purchase. Thanks, Ontario, we’ll take it!
Are you in the beginning stages of a move and are wondering what is available? Learn more about your options by browsing our featured listings.
The Steps to Buying Your First Home in Ontario
Surely, I have enthralled you enough with tax rebates and saving strategies. So, let’s move on to the more practical steps you will follow to buy your first home. I’ve created a simplified list below to help you understand the main stages to buying your first home that every first-time home buyer in Ontario needs to know. Here we go…
Step 1. Hire a Realtor.
I strongly encourage you to hire an experienced and professional Realtor who has a solid list of references and deep knowledge of the area you would like to live in. This is paramount to a successful purchase and the beginning of your real estate investment journey.
A reputable R ealtor will be able to guide you through the buying process at every stage, without applying undue pressure for you to buy. Purchasing your first home is a huge step in life, and likely the largest investment decision you will make. Although buyers often experience a little stress on this new journey, buying your first home should be a positive, ethical, safe and financially sound experience for you.
Step 2: Prepare your Finances
You will want to assess your personal financial readiness to purchase a home in order to understand what you can afford to spend, and how much debt you are qualified and comfortable taking on in the form of a mortgage. You will also want to establish which lender you will partner with for your mortgage. Start by checking your credit score, calculating your available down payment, and applying for a Mortgage Pre-Approval.
Don’t be afraid to shop multiple lenders such as banks, credit unions and mortgage brokers to find the best rates and programs. Your Realtor should help you with resources. When you have a pre-approval in place from a lender, that will tell sellers you are a serious buyer, and you are ready for the excitement of step 3.
Step 3. House Hunting.
This is the most fun part of the process for most first-time home buyers. I usually recommend you make a list of your must-haves and your nice-to-haves, along with the neighbourhoods, school zones, and proximities to things like highways and amenities that suit your needs.
The clearer you are with your Realtor about what you want, the more efficient your search will be. This is a good time to chat with your Realtor about your tolerance for home maintenance, yards and gardens, upkeep and potential renovations.
Step 4. Make an Offer.
Your Realtor will prepare an Agreement of Purchase and Sales that includes the price and the conditions you will put forward to the seller for consideration. These conditions might include things like an inspection, a financial condition, a specific closing date etc.
In fact, your Realtor may have to negotiate back and forth on your behalf a few times before the seller accepts and ultimately agrees to enter a binding contract for you to purchase their home.
Step 5. Due Diligence.
Now that you and your Realtor have successfully negotiated a purchase agreement, you will quickly move to complete the steps (conditions) to close.
These usually include a home inspection by a licensed inspector (your \Realtor can provide resources), finalizing your mortgage terms with your lender, and then waiving all conditions of sale once they have been “satisfied” in legal terms. Your Realtor handles the legal paperwork associated with each step of the process.
Believe it or not, we have even more buying tips for you! Just check out the posts below:
Step 6. Closing.
Now, If you have arrived at step 6, you are almost settled on the sofa in your new home. Closing steps generally refer to the work of a real estate lawyer. This is a requirement in Ontario for all transactions. If you do not have a real estate lawyer, your Realtor will have resources for you and the knowledge to guide you through these steps.
Expect to pay between $1500 and $2000 for a qualified lawyer. Your real estate lawyer handles important legal elements like title search, mortgage registration, land transfer tax and all closing adjustments.
Behind the scenes on closing day, your lawyer will coordinate with the seller’s lawyer to ensure all documents are properly signed, all applicable money is transferred, the mortgage is registered, and the keys to your new home are delivered to you.
Finally, you will then be ready to enter your new home and begin the exciting phase of home ownership! Don’t forget to change locks, if necessary, set up your utilities, meet your new neighbours, and hug your Realtor.
For more details on buying your first home, or to kick start your journey, get in touch with one of our Burlington Real Estate Agents. You can send an email to sarah@sarahlogue.ca or call 905.331.6790 to take the next step.
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