Government Cancels Unpopular Incentives Program for First-Time Home Buyers

End of First-Time Home Buyer Incentive

The Canadian federal government just announced the discontinuation of the First-Time Home Buyer Incentive, a program that had been under scrutiny since its inception. This initiative, designed to enhance housing affordability for first-time buyers, had a lukewarm reception from buyers.

Program Termination Details

The Canada Mortgage and Housing Corporation (CMHC), the national housing agency, confirmed the termination of the program on its website. The announcement stated that no new or updated applications would be accepted after midnight ET on March 21. Any applications resubmitted after this date would undergo a manual review, with the final date for review requests being midnight Eastern Time on March 25. The program would cease granting new approvals after March 31.

Program Overview and Reception

The Program was launched in September of 2019, and it was administered by the Canada Mortgage and Housing Corporation. The Incentive was created to assist eligible first-time buyers through a shared-equity scheme. It provided a contribution of 5% or 10% towards the purchase of a newly constructed home, and 5% for the purchase of a resale existing home or new/resale mobile or manufactured home.

However, the shared-equity component, which implied that the government would also profit from any potential future sale of a home, was not well-received by buyers. The Incentive required repayment either after 25 years or upon sale of the property.

Criticism and Challenges

The program faced significant hurdles from the start. There was a constant criticism from both politicians and the mortgage industry, criticized its cost and the low level of consumer interest, urging CMHC to abandon the scheme after reports revealed its uptake was significantly below projections.

Currently Existing Options for First-Time Buyers

In the wake of the discontinuation of the First-Time Home Buyer Incentive, prospective home buyers may consider other programs or incentives. For instance, there are several supports and programs for first-time buyers in Canada, including the Home Buyers’ Plan, the new first home savings account (FHSA), land transfer tax rebates and the low 5-20% down payment option.

  1. Home Buyers’ Plan (HBP): This program allows you to withdraw up to $35,000 from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself.
  2. First Home Savings Account (FHSA): The FHSA is a registered plan that allows first-time home buyers to save for their first home tax-free, up to certain limits. If you opened an FHSA in 2023, you can claim up to $8,000 in FHSA contributions you made by December 31, 2023, as an FHSA deduction on your 2023 income tax and benefit return.
  3. Land Transfer Tax Rebates: Various provinces and municipalities offer land transfer tax rebates for first-time buyers. For example, in Ontario, first-time buyers may qualify to reduce or eliminate the amount of property transfer tax they pay.
  4. Smaller Down Payment: The Canada Mortgage and Housing Corporation (CMHC), Sagen and Canada Guaranty provide mortgage loan insurance that enables first-time buyers to get a mortgage for up to 95% of the purchase price of a home. It also ensures a reasonable interest rate, even with the smaller down payment.

These programs aim to make homeownership more accessible and affordable for first-time buyers. Remember to check the specific eligibility criteria and requirements for each program based on your individual circumstances.


The discontinuation of the First-Time Home Buyer Incentive marks the end of a contentious chapter in Canadian housing policy. The program’s intention to improve housing affordability for new buyers was commendable, but its execution and reception fell short of expectations. As we move forward, it will be crucial to learn from this experience and develop more effective strategies to address housing affordability in Canada.

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Disclaimer: Please note that this information is current as of the date of publication and is intended to be general in nature. It is not intended to provide legal, tax, financial, or other professional advice and should not be relied upon as such. Always consult with a professional for advice tailored to your individual circumstances.

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