Posted by Maryann Quenet on Monday, August 18th, 2025 10:41am.
The path to homeownership in the Greater Toronto Area is changing in meaningful ways. Ottawa has rolled out new incentives, adjusted mortgage rules, and doubled down on a national plan to boost supply. For first-time buyers, there are real cost savings on new construction. For everyone else, there are new lending thresholds, programs to watch, and timelines to plan around. This guide breaks down what matters now, what it could mean for your budget, and how to turn the rules to your advantage.
Full federal GST relief on many first-time buyer new homes, and partial relief up to $1.5M. First-time buyers pay no federal 5% GST on eligible new homes priced up to $1,000,000, with a sliding reduction for $1,000,000–$1,500,000 new builds, subject to legislation and conditions. That is a potential savings worth up to ~5% of the purchase price on qualifying new construction.
30-year insured amortizations for first-time buyers of new builds. For qualifying insured mortgages on new construction, first-time buyers can stretch payments over 30 years, lowering monthly costs (not interest paid over the life of the loan).
Insured mortgage cap increased to $1.5M. More GTA properties can now qualify for insured mortgages with down payments under 20% (subject to borrower and property eligibility), up from the previous $1M cap.
RRSP withdrawal room under the Home Buyers’ Plan (HBP) is $60,000 per buyer. Couples can now combine up to $120,000 toward a first home, with CRA-set repayment rules.
First Home Savings Account (FHSA) remains powerful. Contribute $8,000 per year (up to $40,000 lifetime), get a tax deduction, and withdraw tax-free when you buy a qualifying first home. Any unused room can carry forward.
Foreign buyer ban remains in place until January 1, 2027. Non-Canadians are generally prohibited from purchasing residential property in CMAs/CAs (which includes the GTA), with defined exemptions.
Canada’s Housing Plan targets more homes by 2031. The federal strategy aims to unlock 3.87 million new homes by 2031 (with at least 1.2 million tied to federal actions), alongside initiatives like Canada Builds to accelerate construction with the provinces and territories. Expect these policies to influence supply pipelines across the GTA over the next few years.
If you are eyeing a new condo or low-rise build, the GST relief and 30-year insured amortization can improve both your closing affordability and your monthly cash flow:
Closing-cost relief: On a $900,000 qualifying new build, removing the federal 5% GST can mean up to ~$45,000 in savings (builder pricing and rebate mechanics vary; the relief targets the federal portion only, not Ontario’s provincial HST component).
Monthly payment flexibility: Extending to 30 years can smooth payments during a high-rate period, while keeping your insured down payment options open.
Bottom line: If you were on the fence between resale and new construction, the math may tilt toward select new projects—especially those completing in your preferred timeline.
With the insured-price ceiling lifted to $1.5M, more family-sized GTA options can qualify for insured financing with <20% down, subject to income, stress test, and property guidelines. For buyers with strong income but limited down payment, this can expand your search radius, your home type options, or both.
A smart savings stack could look like this:
Open and fund an FHSA to capture tax deductions now, then withdraw tax-free for your first purchase when you are ready.
Pair with the HBP to withdraw up to $60,000 from your RRSP (each buyer), adding flexible, low-friction down payment capital.
This combo can materially shift your buying timeline, your down payment tier, and your mortgage insurance premiums.
The national plan calls for millions of additional homes by 2031 and programs like Canada Builds to streamline delivery. While these are multi-year plays, early projects, approvals, and public-lands developments can affect neighbourhood-level supply and pricing. For buyers, that may translate into more choice and less bidding-war pressure in certain pockets over time.
No. The relief targets first-time buyers of new or substantially renovated homes, with a full rebate up to $1,000,000, and a phased reduction up to $1,500,000. Resale transactions are not eligible.
No. The 30-year insured amortization specifically applies to first-time buyers purchasing new construction with insured mortgages, per federal rules.
Yes. The federal prohibition is currently extended to January 1, 2027, with defined exemptions.
Under the HBP, up to $60,000 per eligible buyer, with CRA-set repayment timelines.
Generally $8,000 per year, $40,000 lifetime, with potential carry-forward of unused annual room, and tax-deductible contributions.
Policy shifts are creating new pathways—especially for first-time buyers considering new construction—and widening the financing window for a broader range of GTA homes. If you calibrate your search to the updated rules, line up the right savings vehicles, and time your move with supply coming to market, you can turn 2025’s changes into a practical advantage.
If you are ready to start house hunting, browse listings now—or better yet, start working with an agent right away so you can take full advantage of the 2025 rules. Contact The Johnson Team to get started today.