A simple guide to buy a house in Canada, rules and regulations explained
Owning a home is something that every individual dreams of, but right now, it feels like a distant dream as
Canada
is in the middle of one of its worst housing crises.
Realty prices are high, rental costs are rising, and there just aren't enough houses being built to keep up with demand.
Housing Minister Sean Fraser recently said, "I think that we need to deliver more supply, make sure the market is stable. It's a huge part of our economy, but we need to be able to deliver more affordable housing."
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The government is focusing on building more houses and helping first-time buyers with new mortgage rules, tax-free savings accounts, and longer repayment plans.
Despite the challenges, there are still ways for many Canadians to buy their first house.
Live Events
Why is the crisis happening?
Governments at all levels scaled back investments in housing for decades, failing to anticipate the needs of a growing population. As planning restrictions tightened and affordability declined, Canada fell behind in building houses for future generations.
Municipal fees, limited high-density zoning, and retreating federal support all added to higher construction costs and delays.
While renewed investments since 2017 sparked a wave of rental projects and first-time buyer support, post-pandemic pressures, rising interest rates, a booming population, and supply-chain challenges have reignited the crisis.
Rents and home prices have continued to climb, leaving many young Canadians uncertain about their future. A growing number are now questioning whether they can afford a place to live today, or if they'll ever be able to own a home at all.
Solving the housing crisis
Prime Minister Mark Carney and the Liberal government have launched an unprecedented $36 billion housing plan, aiming to double Canada's new construction to nearly 500,000 units per year via the new Build Canada Homes initiative .
This includes direct federal development of affordable housing on public lands, $25 billion in financing for prefabricated and modular-house builders (leveraging advanced materials like mass timber), and another $10 billion in low-cost loans to spur project starts.
To reduce red tape and development costs, the plan halves municipal development charges for multi-unit buildings, revives the old Multiple-Unit Residential Building (MURB) investment tax allowance, and eliminates the GST for first-time homebuyers purchasing homes under $1 million, saving some up to $50,000.
The government is also extending the Housing Accelerator Fund to entice provinces and cities to fast-track zoning reforms, easing the construction of "missing middle" houses like duplexes and triplexes.
New laws and policies aim to make housing permanently affordable across Canada's diverse communities. Ottawa has signaled a commitment to ensure no household spends more than 30 percent of its income on shelter and is targeting support for Indigenous, newcomer, racialized, disabled, and vulnerable populations.
The Affordable Housing and Groceries Act (Bill C‑56) removes GST on rental developments through 2030 to incentivize affordable builds. Financial mechanisms are being modernized as first-time buyers benefit from extended 30-year amortization on new homes, while mortgage and tax structures are being reviewed to expand choice and reduce borrowing costs.
Canada's national housing plan aims to restore that dream by building more homes faster, lowering costs, and supporting the most vulnerable. But solving this crisis demands a united, 'Team Canada' effort across all levels of government and community.
How can you still manage to own a house?
Open a
First Home Savings Account
First-time buyers can save up to $8,000 annually, with a $40,000 lifetime limit, and enjoy tax-free withdrawals when buying a qualifying home. This program was introduced in 2023, and it helps reduce the financial barrier to entry. Contributions are also tax-deductible.
Home Buyers Plan
You can withdraw up to $60,000 from your RRSP tax-free (or $120,000 for couples) to buy your first home. Withdrawals made between 2022–2025 have a five-year grace period before repayment begins.
Get your mortgage pre-approved
A pre-approval shows sellers you're serious and financially prepared. It locks in an interest rate for 60–130 days and gives you a clear idea of your maximum budget. Most lenders now allow fully digital pre-approvals. Different lenders have different definitions and criteria for each step they offer.
Co-signer is important
If your income or credit history isn't strong, a co-signer, often a parent or close relative, can help you qualify for a larger loan. But remember, they share full legal responsibility for the mortgage if you default.
Maximizing the down payment
A down payment is the amount of money you put towards the purchase of a home. Your mortgage covers the rest of the price of the home. If you put down at least 20 percent, you won't need to pay mortgage insurance, which can cost thousands. Even a little extra can save you a lot over time.
Research local and provisional incentives
In 2025, many provinces will offer financial relief for first-time buyers.
Ontario provides up to $4,000 in land transfer tax rebates, while British Columbia offers a full exemption (worth up to $10,000) on the property transfer tax for homes under $525,000.
Nova Scotia and PEI have first-time homebuyer grants ranging from $5,000–$10,000.
Some cities also offer pilot programs with matching down payments or reduced property taxes for affordable homes. These programs can significantly reduce your upfront costs.
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