First-Time Home Buyer Incentive: What Happened and What to Use Instead

This article is general information only. The First-Time Home Buyer Incentive is no longer accepting applications. Confirm your situation with a qualified advisor.

If you have been searching for the First-Time Home Buyer Incentive, the short answer is: it closed. The Government of Canada wound down the program in March 2024, and new applications stopped being accepted as of March 21, 2024. Buyers who had an approved application and a qualifying closing before the deadline were not affected, but no new participants can enter the program.

The 5,400 or so Canadians who search for this program each month are typically in one of two situations: they found a reference to it somewhere and are wondering if it still exists, or they are researching what happened and what their options are now. This guide covers both.

What the First-Time Home Buyer Incentive was

The First-Time Home Buyer Incentive (FTHBI) was a shared-equity mortgage program run by the Canada Mortgage and Housing Corporation (CMHC). Launched in September 2019, it worked like this:

CMHC contributed 5% of the purchase price toward your down payment on an existing (resale) home, or 5% or 10% on a newly built home.
You did not have to repay a fixed dollar amount. Instead, CMHC held an ownership stake in the home equal to the percentage it contributed.
When you sold the home — or after 25 years, whichever came first — you repaid CMHC's share at the market value at that time, not the original amount contributed.

Example of the repayment risk: If CMHC contributed 5% on a $500,000 home ($25,000), and the home later sold for $700,000, you would repay 5% of $700,000 — $35,000, not $25,000. In rising markets, the repayment amount grew with the home value.

Eligibility (when it was active):

Household income below $120,000 (or $150,000 in certain high-cost areas like Toronto, Vancouver, and Victoria)
Insured mortgage (less than 20% down payment)
Purchase price limited to 4x (or 4.5x in higher-cost areas) qualifying household income
Canadian citizen, permanent resident, or non-permanent resident authorized to work in Canada

Why the program was wound down

The FTHBI attracted ongoing criticism for several reasons:

Limited reach in expensive markets. The income cap of $120,000 and the 4x income multiplier meant the eligible purchase price in most of Toronto and Vancouver was far below actual market prices. A $120,000 income household could access an incentive on a home up to roughly $480,000 — a price point that barely existed in those cities at launch.
The shared-equity repayment was misunderstood and disliked. Many buyers did not want to share upside with CMHC. In a market rising 15–20% per year, the repayment obligation grew faster than the initial benefit was worth.
Uptake was far below projections. The federal government projected roughly 100,000 buyers would use the program over three years. Actual uptake was a fraction of that. Government documents acknowledged the program was not delivering the intended impact.
The FHSA launched in 2023. The First Home Savings Account offered a cleaner mechanism for first-time buyer support — tax deduction on contributions, tax-free qualifying withdrawals, no repayment obligation, no shared equity — making the FTHBI redundant in most scenarios.

The Government of Canada announced the wind-down in March 2024, effective immediately for new applications, with the final closing date for approved applications set at March 21, 2024.

Source: Government of Canada press release on wind-down of the First-Time Home Buyer Incentive, March 2024.

What to use instead

If you were counting on the FTHBI, the combination of current programs available to first-time buyers is actually more useful for most buyers:

First Home Savings Account (FHSA) — the primary alternative

The FHSA is open to first-time buyers who are Canadian residents, 18+, and meet the first-time buyer definition. You contribute up to $8,000 per year (lifetime limit: $40,000), get a tax deduction, and make a tax-free qualifying withdrawal when you purchase a home — with no repayment obligation whatsoever.

Unlike the FTHBI's shared-equity model, the FHSA gives you full ownership of your home from day one. The government's contribution is indirect — through the tax deduction on contributions and the tax exemption on the withdrawal — rather than an ownership stake.

See the full guide: FHSA Canada: The Complete First Home Savings Account Guide.

Home Buyers' Plan (HBP) — if you have RRSP savings

The HBP lets you withdraw up to $60,000 (raised from $35,000 in Budget 2024) from your RRSP tax-free toward a first home purchase. Unlike the FHSA, the HBP withdrawal must be repaid over 15 years — but it draws on existing RRSP savings and is often a significant source of down payment for buyers who have been contributing to their RRSP for years.

See the full guide: Home Buyers' Plan (HBP): RRSP Withdrawal for Your First Home.

Land transfer tax rebates

These are not substitutes for the FTHBI's down payment contribution, but they reduce closing costs — which directly reduces the cash you need to bring to the table:

Ontario: Up to $4,000 rebate on provincial land transfer tax
Toronto: Up to $4,475 additional rebate on municipal land transfer tax
BC: Full exemption from Property Transfer Tax on the first $500,000 for qualifying homes up to $835,000 (as of April 1, 2024)

Use the land transfer tax calculator to see the rebate that applies to your purchase.

CMHC-insured mortgages remain available

CMHC mortgage default insurance — which is not the same as the FTHBI — remains active. With less than 20% down payment, your mortgage is insured by CMHC (or one of the two private insurers: Sagen or Canada Guaranty). This makes high-ratio lending accessible for buyers who do not have 20% saved. It is not a subsidy — you pay the insurance premium — but it enables a lower down payment. See the CMHC insurance calculator for the premium on your purchase.

Comparing the old FTHBI to current options

| Feature | FTHBI (closed) | FHSA | HBP | |---|---|---|---| | Status | Closed March 2024 | Active | Active | | Government contribution | 5–10% of purchase price as equity stake | Tax deduction + tax-free withdrawal | No-tax-at-withdrawal benefit | | Repayment required? | Yes — market-value share on sale or in 25 years | No | Yes — over 15 years | | You retain full ownership? | No — CMHC holds a share | Yes | Yes | | Income cap | $120,000–$150,000 | None | None | | Purchase price cap | 4–4.5× income | None (must be principal residence) | None | | Maximum benefit | 10% of purchase price | Up to $40,000 saved (at 45% MTR, ~$18K in tax savings) | Up to $60,000 per person |

Frequently asked questions

Is the First-Time Home Buyer Incentive still available?

No. New applications stopped being accepted after March 21, 2024. The program was wound down by the Government of Canada and CMHC. Existing participants with approved applications and qualifying closings before the deadline were not affected.

Why did the First-Time Home Buyer Incentive end?

The program had significantly lower uptake than projected, faced criticism for its income and purchase price caps that excluded buyers in expensive markets like Toronto and Vancouver, and was seen as redundant once the FHSA launched in 2023 with a cleaner mechanism. The government announced the wind-down in March 2024.

What is the best alternative to the First-Time Home Buyer Incentive?

For buyers who qualify, the FHSA is the primary tool — it offers a tax deduction on contributions, tax-free growth, and a tax-free qualifying withdrawal with no repayment obligation. The HBP is a strong complement for buyers with RRSP savings. Land transfer tax rebates reduce closing costs. None of these involve shared equity, so you retain full ownership from day one.

Can I combine the FHSA and the HBP?

Yes. Both can be used toward the same qualifying first-home purchase. See the First-Time Home Buyer Guide for how they work together.

Is there a replacement program for the FTHBI?

The federal government has not announced a direct replacement for the shared-equity model. The FHSA, which launched before the FTHBI wound down, is effectively the policy successor — broader eligibility, no purchase price cap, and a cleaner mechanism. Provincial programs (Ontario, BC, and others) supplement it with closing-cost relief.