First-time home buyers in Muskoka: programs, tax refunds and closing costs

A first purchase in Muskoka can draw on several programs. Each one has its own test: a federal savings account, an RRSP withdrawal plan, an Ontario tax refund, a federal rebate on new homes and a district loan. This guide sets out what the public sources state about each, the CMHC insurance table, the closing cost categories and the questions to put to your lender and lawyer.

It is general information and not legal, tax or financial advice. Programs change, so read the named page before you rely on a summary.

Saving for the down payment

First Home Savings Account

The CRA describes the FHSA as an account for a first home. The annual contribution limit is $8,000 with a lifetime cap of $40,000. In the year you open your first FHSA you have $8,000 of participation room. Unused room carries forward up to $8,000 while total room stays capped at $40,000.

To open one you must be 18 or older, a resident of Canada and a first-time buyer for FHSA purposes. That means you did not live in a qualifying home that you owned (or that your spouse or common-law partner owned when you open) in the current calendar year before opening or in the 4 prior calendar years. A qualifying home is a housing unit in Canada, existing or being built, which includes houses, semis, townhouses, condo units and mobile homes.

Contributions can be deducted in the year made or a later year. Undeducted amounts carry forward. Only the account holder may claim the deduction. Transfers from an RRSP to an FHSA are not deductible. Neither are contributions made after the first qualifying withdrawal.

A withdrawal is tax-free when it meets the CRA conditions:

• You have a written agreement to buy or build, with closing or completion before October 1 of the year after the withdrawal.
• You did not acquire the home more than 30 days before the withdrawal.
• You remain a resident of Canada until you acquire the home.
• You intend to occupy it as your principal residence within 1 year.
• You give Form RC725 to the account issuer.

A withdrawal that does not qualify is taxed as income in the year you receive it. The CRA says to close all FHSAs by December 31 of the year after the first qualifying withdrawal. The blog post on the FHSA and the Home Buyers’ Plan goes through the two in more detail.

Home Buyers’ Plan

The Home Buyers’ Plan lets you withdraw up to $60,000 from your RRSPs toward a first home and repay it over 15 years. The CRA states a temporary relief: for first withdrawals from January 1, 2026 to December 31, 2028, the 15-year repayment starts in the 5th year after the year of first withdrawal.

The conditions include a written agreement to buy or build at the time of withdrawal (a mortgage pre-approval does not count), Canadian residency, an intention to occupy the home within 1 year and a zero balance on any earlier plan on January 1 of the withdrawal year. You withdraw only from RRSPs where you are the annuitant and complete Form T1036 for each withdrawal. The first-time buyer test is that you did not live in a home you or your spouse or common-law partner owned in the current calendar year before the withdrawal (excluding the 30 days before it) or the 4 prior calendar years.

The CRA says the Home Buyers’ Plan and qualifying FHSA withdrawals can both be used for the same qualifying home if the conditions are met at each withdrawal.

Ontario land transfer tax and the first-time buyer refund

Ontario charges land transfer tax on a purchase in graduated bands, so each band of the price is taxed at its own rate:

Portion of the price	Rate
Up to and including $55,000	0.5%
Over $55,000 up to and including $250,000	1.0%
Over $250,000 up to and including $400,000	1.5%
Over $400,000	2.0%
Over $2,000,000, where the land has one or two single family residences	2.5%

Ontario’s page says a buyer in the City of Toronto may also pay that city’s own municipal tax. The pages checked for this site showed no municipal land transfer tax elsewhere, so ask your lawyer to confirm what applies to the property you are buying. The land transfer tax calculator applies the rates to a price you enter and gives an estimate only.

The first-time buyer refund is a maximum of $4,000 for transfers on or after January 1, 2017. Ontario’s page states that homes valued up to $368,000 pay no Ontario land transfer tax, so the refund covers the full tax at that level. The conditions are:

1. You are 18 or older.
2. You occupy the home as your principal residence within 9 months of the transfer.
3. Neither you nor your spouse has ever owned a home or an interest in one anywhere in the world.
4. For agreements signed after November 14, 2016, you are a Canadian citizen or permanent resident. A buyer who is not yet one at closing has 18 months after registration.
5. The home is an eligible type: detached, townhouse, condo unit or certain 2 to 4 unit buildings.

If a purchaser on title does not qualify, the refund is reduced in proportion. The claim deadline is 18 months after registration of the transfer. Ask your lawyer at the first meeting whether the refund is applied at closing or claimed afterward.

The GST/HST rebate for a new home

Buying a new home from a builder brings a different federal measure. The CRA page dated March 17, 2026 says the first-time home buyers’ GST/HST rebate is accepting applications for newly built or substantially renovated homes that will be your primary residence.

• Amount: up to 100% of the GST (or the federal part of HST), capped at $50,000.
• Price: the full amount applies at or under $1 million, it is reduced between $1 million and $1.5 million and none is available at $1.5 million or more.
• Buyer test: 18 or older with Canadian citizenship or permanent residence. You did not live in a home that you or your spouse or partner owned in the current year or the previous 4 years. Neither of you received this rebate before.
• Dates: the builder agreement signed on or after March 20, 2025 and before 2031, with construction substantially completed and ownership transferred before 2036.
• Ontario: the CRA page says Ontario offers an additional provincial rebate on part of the 8% provincial HST, claimable with the federal rebate.
• Claiming: the builder may credit it at closing. Otherwise you apply through your CRA account or on Form GST190, generally within 2 years of taking ownership.

The post on the GST/HST rebate for new homes in Muskoka covers this further. Ask the builder and your lawyer how the rebate is handled in the agreement.

How mortgages work

A mortgage is a loan secured on the home. The FCAC describes the main choices:

• Fixed rate: rate and payments stay the same for the whole term. The rate usually starts higher than a variable one.
• Variable rate: the rate can rise or fall during the term and usually starts lower. With fixed payments a rate rise can send more of each payment to interest.
• Open: you can make extra payments or pay it off at any time. Rates are usually higher.
• Closed: rates are usually lower. Yearly extra payments are capped by prepayment privileges that vary by lender.
• Term: the length of the contract, from a few months to 5 years or more, after which you renew until the loan is paid off.
• Amortization: the total time to repay in full. A longer amortization lowers payments and raises total interest.

This site does not quote rates. Kandice Moore is a Mortgage Agent Level 1 with BRX Mortgage Inc. operating as BRX Mortgage (FSRA licence 13463). The mortgages page shows the licence details and how to reach her. The mortgage calculator lets you test payment amounts for figures you choose. The results are estimates.

Down payment and CMHC insurance

The minimum down payment on a one or two unit owner-occupied home is 5% of the first $500,000 of lending value plus 10% of the rest, according to CMHC. For three or four units it is 10%. The FCAC lists the tiers this way:

Purchase price	Minimum down payment
$500,000 or less	5%
$500,000 to $1.5 million	5% of the first $500,000 plus 10% of the rest
$1.5 million or more	20%

With less than 20% down the mortgage generally needs default insurance. CMHC states the insurable price limit as under $1,500,000. The Department of Finance raised the cap from $1 million to $1.5 million effective December 15, 2024. One FCAC page still words the limit as $1 million, so this guide follows CMHC.

CMHC states the premium as a percentage of the total loan, by loan to value:

Loan to value	Premium
Up to 65%	0.60%
65.01 to 75%	1.70%
75.01 to 80%	2.40%
80.01 to 85%	2.80%
85.01 to 90%	3.10%
90.01 to 95%	4.00%
90.01 to 95% with non-traditional down payment	4.50%

CMHC notes that Ontario applies provincial sales tax to premiums and that tax cannot be added to the loan. Energy-efficient homes may get up to a 25% premium refund. Other CMHC conditions: the borrower or a close relative lives in the home. At least one borrower or guarantor has a credit score of 600 or higher. The debt service ratios stay within the stated limits. See the post on mortgage loan insurance premiums for more.

Amortization and the qualifying rate

For an insured mortgage with less than 20% down, the FCAC lists a maximum amortization of 30 years for first-time buyers or new builds and 25 years otherwise. The Department of Finance extended 30 years to all first-time buyers and all buyers of new builds effective December 15, 2024. CMHC’s purchase page words this differently, with 25 years and 30 years through CMHC Home Start, so ask the lender which applies. On an uninsured mortgage the lender sets the maximum.

OSFI sets the minimum qualifying rate for uninsured mortgages at the greater of the contract rate plus 2% or 5.25%. OSFI reviews the floor and buffer at least annually. CMHC states a similar test for insured loans, using the higher of the contract rate plus 2% or 5.25%.

Muskoka district programs

The District Municipality of Muskoka lists four housing programs: Gateway, Ontario Renovates, Additional Residential Units and the Development Charges Loan. Two of them concern first-time buyers.

Gateway Homeownership Program

Gateway is a District-funded down payment loan under the Muskoka Affordable Housing Initiative Program. The page lists a loan of up to the lesser of $70,000 or 10% of the price, for a home in Muskoka priced at $804,300 or less. The household income limit is $117,300 or less, assets must be $50,000 for a single applicant or $75,000 for a household and the applicant must not own a home.

The page says 2026 funding is fully allocated and new eligible applications go on a wait list. It is not open for funding now. Read the page for the current position before you plan around it.

Development Charges Loan

This is an interest-free loan of up to $15,000 for first-time buyers buying or building a new home in Muskoka. It is forgiven if the rules are followed for 3 years. The same income and asset limits apply, the home price must be $804,300 or less and you apply within 6 months of deed transfer or occupancy permit.

The page does not say whether the program is open or closed. It says funding is limited and applications are reviewed in the order received. Contact the Affordable Housing Office at 705-645-2100 ext. 4410 to ask about current status before you count on it.

Closing costs

The FCAC names these closing cost categories: a home inspection, legal fees, property tax adjustments and title insurance. It suggests budgeting 1.5% to 4% of the purchase price. Use this list with your lawyer and lender:

• Ontario land transfer tax, less any refund you qualify for.
• Your lawyer’s fees and disbursements.
• Title insurance, if your lawyer recommends it.
• Property tax adjustments between you and the seller, worked out on the closing date.
• A home inspection by a qualified inspector.
• A survey, if the lawyer or lender needs one.
• Home insurance in place for closing day.
• Utility transfers and any deposits.
• The mortgage insurance premium and the provincial sales tax on it, if you have less than 20% down.
• Moving costs and immediate repairs.

The blog post on cottage closing costs and land transfer tax covers more of this.

Town, rural or waterfront property

A first purchase can be a town house, a rural lot or a cottage. The checks differ. In a town, ask the municipality whether the property connects to municipal water and sewer, which charges appear on the tax bill and whether the street is a municipal road. For a private septic system, the building department of the area municipality holds the permit record. A qualified septic inspector can inspect the system. For a private well, the health unit is the office to ask about water testing. On the water, ask your lawyer about the shoreline strip and the municipality about the dock. The waterfront and cottages guide lists the questions.

Ask your lender before you make an offer whether it has rules for rural, seasonal or waterfront properties.

Documents to gather

Lenders set their own lists, so ask for the one that applies to you. Common items are:

• Government photo identification.
• Proof of income and employment as the lender requires.
• Records of where your down payment came from, including FHSA or RRSP withdrawals.
• Statements of debts and credit.
• For the refund and rebates, your residency and past home ownership details.

Steps from start to closing

1. Speak to a lender and a lawyer, then arrange your approval.
2. Check which programs you meet the test for and confirm each with the named body.
3. Decide which communities fit your needs, using the guides for Huntsville, Bracebridge and Gravenhurst.
4. Ask Kandice or Kirby about current listings, since this site shows no home search.
5. Make an offer with your agent and lawyer, including any conditions you need for financing or inspections.
6. Complete inspections and review the survey, permits and septic records.
7. Arrange insurance and instruct your lawyer on closing.
8. Close, claim the refunds that apply and keep your records.

Next step

Start with the land transfer tax calculator and the mortgage calculator, then take the results and the closing cost list to your lawyer and lender. The mortgages page explains how to reach Kandice about financing. For places and properties, ask Kandice or Kirby through the contact page. The buyers page explains the buying process.