A home is usually the single largest investment that most people make in their lives. Achieving your dream can be made easier by taking advantage of various Government Programs for home buyers and property owners. Some of the programs are targeted to first-time buyers, while others apply more generally. Other programs benefit those in the industrial, commercial and multi-unit property market. As your REALTOR® I can provide information on these programs and help you to determine your eligibility.

Government Programs for Home Buyers

First-Time Home Buyers’ Tax Credit

First-time home buyers may be eligible for a 15 per-cent income tax credit for closing costs. An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years. click here for more details

First-Time Home Buyers’ Incentive

The First-Time Home Buyer Incentive makes it easier for you to buy a home and lower your monthly mortgage payments. This program is a shared equity instrument. It works by getting an extra 5% or 10% of the down payment of your home and then repaying the Government either 5% or 10% of the property’s market value at the time of repayment, up to a maximum repayment amount equal to:

• In the case of appreciation, the Incentive amount plus a maximum gain to the Government of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment; or
• in the case of a depreciation, the Incentive amount minus a maximum loss to the Government of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.

Just as the name implies, this incentive is for first-time homebuyers. You’re considered a first-time homebuyer if:

• you have never purchased a home before
• you did not occupy a home that you or your current spouse or common-law partner owned in the last 4 years (the 4-year period begins on January 1 of the fourth year before the Incentive is funded and ends 31 days before the date the Incentive is funded)
• you have recently experienced the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements) Click here to get more information from the government website

RRSP Home Buyers’ Plan

The Home Buyers’ Plan (HBP) is a program under which you can, generally, withdraw up to $35,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home, subject to eligibility and conditions, then pay back the funds to their RRSP over 15 years. Withdrawals that meet all applicable HBP conditions do not have to be included in your income, and your RRSP issuer will not withhold tax on these amounts. However, before you can withdraw funds you must have entered into a written agreement to buy or build a qualifying home which you must occupy no later than one year after buying or building the home. If you buy the qualifying home together with your spouse or other individuals, each of you can withdraw up to $35,000. You cannot withdraw an amount from your RRSP under the HBP if you or your spouse owned the home more than 30 days before the date of your withdrawal. click here for more details

HST New Housing Rebate

You may be eligible to claim a rebate for a part of the HST you pay on the purchase price of a newly constructed home or the cost of building your home. The purchase price of resale homes are exempt from the HST. The purchase price of newly constructed homes are subject to HST. click here for more details

Land Transfer Tax Rebates (Provincial and Toronto)

First-time buyers of new and re-sale homes are eligible to receive rebates of the provincial and Toronto land transfer taxes. The maximum provincial land transfer tax (LTT) rebate for first-time buyers is $4,000 and the maximum Toronto LTT rebate for first time buyers is $4,475. A FULL rebate of the Toronto land transfer tax is also available for ALL buyers who entered into Agreements of Purchase and Sale prior to December 31, 2007. click here for more details

Ontario Healthy Homes Renovation Tax Credit

The Healthy Homes Renovation Tax Credit is a permanent personal income tax refund for seniors and the family members who live with them. Those who qualify can claim up to $10,000 worth of home modifications on their tax returns and receive back 15 per cent of eligible expenses. A household that spends $10,000 on eligible home renovations potentially can get back $1,500. The tax credit has a $10,000 maximum per couple. click here for more details

Requirements for Government-Backed Mortgage Insurance

Mortgage loan insurance is generally required by lenders when home buyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment starting at 5%. The Government of Canada offers government-backed mortgage insurance with restrictions through its crown agency, Canada Mortgage and Housing Corporation (CMHC). click here for more details

Tax-Free First Home Savings Account (FHSA)

In the 2022 Budget, the Government of Canada proposed the introduction of the Tax-Free First Home Savings Account (FHSA), a new registered plan to help Canadians save towards their first home by allowing account holders to contribute up to $40,000 over the lifetime of the plan.

An FHSA combines the features of a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA) . Like an RRSP, contributions would be tax-deductible and qualifying withdrawals to purchase a first home would be non taxable, like a TFSA. However, with an FHSA and unlike the Home Buyers’ Plan, the funds do not need to be paid back.

Rules and Effective Date

• The FHSA was enacted by Bill C-32, which received Royal Assent on December 15, 2022.
• The enacted rules permit individuals to use the FHSA and the Home Buyers’ Plan together in respect of the same qualifying home purchase.
• The FHSA comes into being on April 1, 2023

Key Features

• This new registered plan gives prospective first-time home buyers the ability to save $40,000 on a tax-free basis.
• Like a Registered Retirement Savings Plan (RRSP), the contributions will be tax-deductible
• Withdrawals to purchase a first home, including from investment income, will be non-taxable, much like a Tax-Free Savings Account (TFSA).
• Annual contribution limit will be $8,000 and in addition there will be a $40,000 lifetime contribution limit.
• Contribution for 2023 will be the full $8,000 annual limit.

Qualifications

To Qualify to open the FHSA:

• An individual must be a resident of Canada and at least 18 years of age.
• An individual must be a first-time home buyer, which means that they may have not owned a home in which they lived anytime in the proceeding for years
• An individual would not be permitted to open up an FSHA after December 31 on the year individual turns 71

Closing the Account

• Individuals that make a qualifying withdrawal could transfer any unwithdrawn savings on a taxfree basis to an RRSP or RRIF until December 31 of the year following the year of their first qualifying withdrawal.
• An FHSA would cease to exist after December 31 the year in which the earliest of these events occurs:
  o The fifteenth anniversary of the individual first opening an FHSA; or
  o The individual turns 71 years old.
• If an individual has not used the funds to purchase a qualifying home, the funds:
  o would be transferred on a tax-free basis into an RRSP or Registered Retirement Income Fund (RRIF) OR
  o would otherwise have to be withdrawn on a taxable basis.

Exceptions

• The current Home Buyers Plan will continue to be available as under existing rules.
• However, an individual would not be permitted to make both an FHSA withdrawal and an HBP withdrawal in respect of the same qualifying home purchase.
• Individuals would not be able to contribute to their spouse or common-law partner’s FHSA and claim a deduction. Click here for more details on the FHSA

Government Programs and Regulations for Property Owners

Provincial Guide on Co-Ownership

Co-ownership housing is a shared living arrangement where two or more people own and live in a home together. Co-owners may share living spaces like kitchens and living rooms, or the home may be divided into separate units. Responsibilities for care and upkeep of the home are usually shared, as well as some amenities and services. click here for more details

Provincial Guide on Life Lease Housing

In life lease housing, the buyer purchases an interest in that property—which gives the buyer the right to occupy a unit for a long period of time, often for their lifetime. Like condo owners, the buyer pays a lump-sum purchase price, and then continues to pay property taxes and monthly maintenance fees. Life leases are usually priced lower than similarly sized condominiums in the area. This could be due to the lack of availability of conventional mortgages and the exemption from land transfer taxes. Life lease housing is usually developed and operated by non-profit or charitable organizations called “sponsors” who own the property. Life lease buyers are often seniors looking to move into smaller homes. click here for more details

Provincial Guide on Tiny Homes

The Planning Act was changed in 2019 to require municipalities to adopt official plan policies and pass zoning bylaws that allow one additional residential unit in the primary residence (i.e., second units) and one in an existing or new building or structure ancillary to the primary residence (i.e., tiny home, garden suite, coach house, laneway suite). This change was designed to help increase the supply of housing and create more options for families. Ontario Municipalities are at different stages of developing these policies, please check with local municipalities.

A tiny home can be a primary home or a separate structure on a property that already has an existing house. Despite their size, tiny homes must still comply with the health and safety requirements of Ontario’s Building Code, municipal zoning and other local by-laws. Tiny homes must also have necessary servicing such as water and sewage. The size of a tiny home varies from municipality to municipality, depending on standards set out in zoning by-laws. click here for more details

Provincial Guide on Second Units

The Planning Act was changed in 2019 to require municipalities to adopt official plan policies and pass zoning bylaws that allow one additional residential unit in the primary residence (i.e., second units) and one in an existing or new building or structure ancillary to the primary residence (i.e., tiny home, garden suite, coach house, laneway suite). This change was designed to help increase the supply of housing and create more options for families. Municipalities in Ontario are at different stages of developing these policies, please check with local municipalities.

A second unit is a self-contained dwelling unit with a private kitchen, bathroom facilities and sleeping areas. Second units can be built in any part of a house. It can be all on one floor or on multiple levels. Most second units are built in the basement or attic. Building Code rules can vary depending on where the second unit is located. click here for more details

Provincial Guide on Laneway Houses

The Planning Act was changed in 2019 to require municipalities to adopt official plan policies and pass zoning bylaws that allow one additional residential unit in the primary residence (i.e., second units) and one in an existing or new building or structure ancillary to the primary residence (i.e., tiny home, garden suite, coach house, laneway suite). This change was designed to help increase the supply of housing and create more options for families. Ontario Municipalities are at different stages of developing these policies, please check with local municipalities.

A laneway house, often referred to as a laneway suite, is a residential unit that is separate from a primary residence and is typically located in the rear yard of a property, connected to a public laneway. While most commonly found in urban areas, laneway houses can also exist in rural settings. Since 2019, City of Toronto has updated its zoning by-laws to allow for construction of laneway suites on residential properties that share a property line with a public lane. click here for more details

Provincial Guide on Shared Equity Homeownership

In shared equity arrangements, a home buyer and shared equity investment provider will both invest in a property and share the potential rewards and risks associated with an increase or decrease in the value of that property over time.  Most shared equity investment providers require home buyers to contribute towards the down payment on the property (usually a minimum of 5% of the purchase price), while the shared equity investment provider contributes to or ‘tops up’ the down payment by providing an additional percentage of the purchase price (often between 5% and 15%). There are no payments required on a shared equity investment until the arrangement ends, whereby the shared equity investment provider will be entitled to receive a portion of the appreciation or depreciation of the home’s value, either at a pre-determined date or at the time when the homeowner chooses to sell, rent out the home, or buy out the shared equity investment provider in advance of any set repayment date. click here for more details

City of Toronto Basement Flooding Protection Program and Subsidy

While the City of Toronto is working to improve its complex system of underground pipes, sewers and catchbasins, these improvements alone cannot completely protect a home from basement flooding. During heavy rain, the sewers can become overloaded. This increases pressure on the sewer systems and overland drainage routes, such as roads, local rivers and streams, which can lead to basement flooding. The City’s Basement Flooding Protection Program is a multi-year program that is helping to reduce the risk of flooding by making improvements to the sewer system and overland drainage routes. Projects are taking place in basement flooding study areas across the city. click here for more details

Canada Greener Homes Grant

The Federal Government has announced a new grant program for eligible homeowners to receive up to $5,000 to support energy-efficient upgrades, such as windows, heating and cooling systems, and solar panels. The grant also provides $600 towards the cost of an EnerGuide Home Energy Evaluation. More details are forthcoming, but work started after December 1, 2020, may be eligible. It is important that interested homeowners read all eligibility criteria and grant requirements to ensure they qualify for reimbursement. click here for more details

City of Toronto Energy Efficiency Incentives

With simple solutions, low-interest loans, and thousands of dollars in rebates available, City of Toronto has put together a list of incentives for homeowners to improve the energy efficiency of their homes. Click here for more details on incentives from the City of Toronto and utility companies, including programs for low-income households.

Carbon Monoxide Detectors

Most Ontario households have around 4–6 carbon monoxide producing appliances such as a furnace, portable generator and gas fireplace. As of April 15, 2015, carbon monoxide detectors have become mandatory in all Ontario homes. To protect Ontarians from carbon monoxide poisoning, the province now requires carbon monoxide detectors near all sleeping areas in residential homes, and in service rooms (such as boiler rooms and garbage rooms) and next to sleeping areas in multi-residential units. click here for more details

Drinking Water Testing (Certificate of Potability for Mortgage Purposes)

The Public Health Laboratories Branch of the Ministry of Health and Long-Term Care provides routine drinking water testing for Ontarians who have their own source of drinking water (e.g. a well) that serves a single household. The Ministry will provide a certificate of potability for mortgage purposes for the sale of a property. To ensure the smooth completion of real estate transactions, it is important that all parties are aware of the timelines involved with drinking water testing. click here for more details

Heritage Property Tax Rebate Programs

Under the Municipal Act, 2001, municipalities may give tax relief to owners of eligible heritage properties by passing a by-law creating a heritage property tax relief program. The province gives municipalities the flexibility they need to adapt their program to local circumstances. Municipalities can set the amount of tax relief they offer within the guidelines of 10 per cent to 40 per cent. To date, 40 municipalities across Ontario have passed a by-law for heritage property tax relief. Municipalities may also have special eligibility criteria in addition to those prescribed in the provincial legislation. click here for more details

Rent Increase Guidelines

The guideline applies to most residential rental accommodations covered by the Residential Tenancies Act. It does not apply to rental units in buildings occupied for the first time after November 15, 2018, social housing units, long-term care homes or commercial property. The rent increase guideline is the maximum most landlords can raise a tenant’s rent without the approval of the Landlord and Tenant Board (LTB).  Increases are based on the Ontario Consumer Price Index (CPI); the CPI is a measure of inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year. Rent increases are not automatic or mandatory. Landlords may only raise rent if they gave tenants at least 90 days written notice using the correct form. In most cases, the rent increase cannot be more than the rent increase guideline. In addition, at least 12 months must have passed since the first day of the tenancy or the last rent increase. click here for more details

Smoke Alarm Requirements

As of March 1, 2006, every home in Ontario is required to have working smoke alarms on every storey or level, including basements. According to information from the Ontario Fire Marshal and as drafted in the Ontario Fire Code, “a smoke alarm is required to be installed between each sleeping area and the remainder of the dwelling unit. Where the sleeping areas are served by hallways, the smoke alarms must be installed in the hallways.” In addition, at least one smoke alarm is required to be installed on each storey that does not contain a sleeping area. Non-compliance with the Ontario Fire Code smoke alarm requirements can result in a ticket for $360 or a fine of up to $50,000 for homeowners, tenants and individual landlords, and up to $100,000 for corporations. click here for more details

Second Suites in Toronto

Second suites are now legal in the City of Toronto in all single family, semi-detached and town homes, providing they meet certain criteria. City Council adopted zoning by-law amendments for secondary suites on March 28, 2019. The purpose and effect of Zoning By-law 549-2019 is to permit secondary suites in townhouses city-wide (in addition to detached and semi-detached homes), remove the requirement for the original house to be at least five years old, remove unit size restrictions and reduce parking requirements. These amendments respond to provincial policy changes to the Planning Act which support secondary suites across the province and seeks to simplify the creation of secondary suites. click here for more details

Second Suites in Ontario

Second suites, also known as basement apartments or auxiliary dwelling units, are private, selfcontained residential rental units within dwellings. Second suites can provide homeowners with extra income to offset ownership costs. According to CMHC, second suites are an important supply of rental housing in many cities, towns, and rural communities across Canada. All regions and municipalities are required to establish policies allowing second suites in new and existing developments as dictated by the Planning Act, 2011. However, not all Ontario municipalities have put in place second suite regulations yet.  click here for more details or contact your local municipalities planning office