Can You Buy a House in Ontario Without a Down Payment?

Navigating Home Affordability in Ontario

The question of whether it's possible to buy a house without a down payment is a common one for prospective homebuyers. While the sources available do not outline a direct path for a zero-down-payment purchase, they do highlight several government programs and tools designed to make homeownership more affordable. Understanding these incentives is a key step in planning your home purchase in Ontario.

Government of Canada Homebuyer Programs

The Government of Canada offers various resources to assist those looking to enter the housing market. The Canada Mortgage and Housing Corporation (CMHC) provides tools and information to help you buy a house or condominium in Canada. These resources include homebuying calculators, such as a mortgage calculator and an affordability calculator, to help you assess your financial situation (Source: CMHC: Buying a home).

In the past, programs like The First-Time Home Buyer Incentive helped to make homeownership more affordable for qualifying buyers (Source: CMHC: Buying a home). It's important for consumers to stay informed about current incentives offered by the Government of Canada. Additionally, CMHC provides information on mortgage loan insurance, which is a crucial component of the homebuying process for many Canadians, particularly those with smaller down payments (Source: CMHC: Buying a home).

Ontario's Land Transfer Tax Refund for First-Time Homebuyers

When you buy land or an interest in land in Ontario, you are required to pay a land transfer tax (LTT). However, the provincial government offers a significant rebate for eligible first-time homebuyers. This program can provide a refund of all or part of the tax, which can help reduce your closing costs (Source: Ontario: LTT refunds for first-time homebuyers).

To qualify for this refund, you must meet specific criteria:

• You must be at least 18 years of age.
• You cannot have owned a home or an interest in a home anywhere in the world, at any time.
• Your spouse cannot have owned a home or an interest in a home anywhere in the world while he or she was your spouse.

It's important to note that previous ownership of any kind, whether through purchase, gift, or inheritance, means you do not qualify for the land transfer tax first-time homebuyers refund (Source: Ontario: LTT refunds for first-time homebuyers).

Understanding the Refund Amount

The maximum amount of the LTT refund has changed over the years. For agreements of purchase and sale entered into after December 13, 2007, the refund applies to all homes, both newly constructed and resale (Source: Ontario: LTT refunds for first-time homebuyers).

For conveyances or dispositions that occurred before January 1, 2017, the maximum refund was $2,000. For those that occur on or after January 1, 2017, the maximum amount of the refund is $4,000 (Source: Ontario: LTT refunds for first-time homebuyers). This increased limit applies regardless of when the agreement of purchase and sale was signed.

A key benefit of this program is that beginning January 1, 2017, no land transfer tax would be payable by qualifying first-time purchasers on the first $368,000 of the value of the consideration for eligible homes. For homes valued at more than $368,000, qualifying first-time purchasers would receive the maximum refund of $4,000 (Source: Ontario: LTT refunds for first-time homebuyers).

Limitations and Special Circumstances

The refund amount can be affected if not all purchasers of the home are first-time homebuyers. The refund is calculated proportionately to the interest acquired by the individuals who qualify (Source: Ontario: LTT refunds for first-time homebuyers).

For example, if a parent who is not a first-time homebuyer and a child who is a first-time homebuyer purchase a home with equal 50/50 interests, the child can claim a refund of 50% of the land transfer tax refund. The child's claim cannot exceed 50% of the maximum allowable refund (i.e., 50% of $4,000 for purchases on or after January 1, 2017) (Source: Ontario: LTT refunds for first-time homebuyers).

In a situation where a parent is on title for financing purposes but does not acquire a beneficial interest, the child may still qualify for the full refund, provided evidence of the trust is submitted, such as a letter from the bank (Source: Ontario: LTT refunds for first-time homebuyers).

How to Claim the LTT Refund

Qualifying taxpayers may claim an immediate refund at the time of registration. This can be done by completing the required statements in the electronic land transfer tax affidavit. If the refund is claimed at registration, it can directly offset the land transfer tax payable (Source: Ontario: LTT refunds for first-time homebuyers). If the refund is not claimed at registration, the tax must be paid in full, and a separate claim for the refund can be submitted to the Ministry of Finance. It is noted that no interest is paid on this type of refund (Source: Ontario: LTT refunds for first-time homebuyers).

While buying a home without any down payment is not a scenario detailed in these government resources, programs like Ontario's LTT refund can provide substantial financial relief, helping to make the goal of homeownership more attainable.

Sources

• CMHC: Buying a home
• Ontario: LTT refunds for first-time homebuyers

General information only, not legal, tax or financial advice. Figures are taken from the official sources above as of October 27, 2026.

Farshad Fazaeli, Salesperson · International Realty Firm, Inc., Brokerage · 647-667-5555