Selling a Home Bought with the First-Time Home Buyer Incentive: Five Decisions to Make Before You List

The federal incentive closed to new applicants in 2024, but every shared equity mortgage it created is still registered on title. Your list price, your buyer, and even your renovation plans all feed into what you hand back to Ottawa.

I’m Arthur Zhao. The First-Time Home Buyer Incentive starts to matter well before closing day. It shows up on the evening you sit down to choose a list price. Every figure you debate at that table has a second party with a stake in it: the Government of Canada, which holds a shared equity mortgage (SEM) on your home and shares in both the upside and the downside of its value.

The program itself is closed. What is still open is your agreement, and it runs until you repay or 25 years pass. This piece walks through the five decisions a seller in that position faces before the sign goes on the lawn, roughly in the order a sale unfolds.

Where the program stands today

According to CMHC (2024), applications to the First-Time Home Buyer Incentive closed at midnight EST on March 21, 2024, and no new approvals were granted after March 31, 2024. The program offered buyers 5% or 10% of the purchase price toward the down payment through a shared-equity mortgage with the Government of Canada.

Closing the program did not cancel existing agreements. The incentive must be repaid in full after 25 years or when the home is sold, whichever comes first, and CMHC says it continues to handle post-approval changes under its Operational Policy Manual.

Decision 1: Repay before you list, or before you renovate?

You can repay the incentive in full at any time without a prepayment penalty. What you cannot do is chip away at it: CMHC states there is no partial payment option.

Two conditions make an early payout more than a phone call:

• An independent appraisal is required. For voluntary early repayment (and at the 25-year mark), the amount is based on fair market value from a third-party appraisal. The appraiser must be in good standing with a recognized Canadian professional association, hold a professional title such as AIC, OEAQ or CNAREA, and carry errors and omissions insurance. The Program Administrator must also concur with the appraised value.
• Renovations are shared, too. The government shares in any appreciation or depreciation “regardless of any borrower spending to improve the home.” CMHC’s factsheet itself notes that owners may want to consider repaying before major improvements, because those improvements raise the value the repayment is calculated on.

So the real question before a pre-listing renovation is sequencing: whether the payout happens on today’s value or on the post-renovation value. The appraisal cost is yours either way, since valuation costs at repayment are among the administration costs the homeowner pays.

Decision 2: How your sale price becomes the repayment

CMHC’s factsheet works through both directions for a resale home bought at $400,000 with a 5% incentive of $20,000, sold after five years. At $480,000, the government’s share of the gain is $4,000, below the $8,000 cap (20,000 × 8% × 5), so the repayment is $24,000. At $330,000, its share of the loss is $3,500, smaller than the $8,000 floor, so the repayment is $16,500. Both figures are before any administration costs.

For a pricing conversation, the useful takeaway is the rate of change. Using the same example, simple arithmetic shows that with a 5% share every $10,000 of sale price moves the repayment by $500. With a 10% share, it moves by $1,000. That relationship holds only until the price reaches the cap or the floor.

Decision 3: Who is buying changes how value is set

On an ordinary sale, the market value is based on the value at the time of sale, which CMHC says would generally be supported by the purchase price in the agreement of purchase and sale. In practice, the signed APS is the evidence.

Two situations change that:

• non-arm’s length sale. If the buyer is not at arm’s length from you (for example, a relative), an independent third-party appraisal by a qualified appraiser is required. The contract price alone will not do.
• A disputed value. Where opinions of value differ, the Program Administrator reserves the right to order its own independent appraisal, at its own cost, to make sure the figure reflects fair market value.

If a sale to family is on the table, the appraisal belongs in the plan from the start, not after the paperwork is signed.

Decision 4: Not selling, but still moving money around

Some changes trigger repayment even though no one buys the house:

• Porting your mortgage to another property triggers repayment of the incentive.
• A partial release of security is treated as a sale and triggers repayment.
• A breakup buyout: if you buy out a co-borrower and that requires additional insured funds, the incentive must be repaid in full.
• Refinancing: CMHC tells borrowers to discuss with their lender whether repayment is required in their refinancing situation.

If you are planning to sell one home and buy the next with the same lender, raise the port question early. The repayment then becomes part of the financing picture for both transactions.

Decision 5: Build the repayment into your closing timeline

According to CMHC’s repayment factsheet (2024), borrowers should notify the Program Administrator at least 10 business days before the repayment or the sale closing date. The process from there:

1. Notify. You or your lawyer contact the Program Administrator. The factsheet lists 1-877-884-2642 and FTHBI@cmhc.gc.ca; the current CMHC program page lists FTHBIOps@cmhc-schl.gc.ca for inquiries. Confirm against whatever CMHC is publishing when you call.
2. Prove the value. Provide the agreement of purchase and sale, or an appraisal that meets program requirements.
3. Receive the invoice. The Program Administrator reviews the documents and sends an invoice with payment instructions.
4. Pay and discharge. Once payment is made in full, the Program Administrator works with you or your lawyer to discharge the SEM.

Budget for the extras as well. The homeowner is responsible for administration costs, which the factsheet describes as including valuation costs at repayment, default management costs and discharge fees. CMHC does not list the dollar amounts, so ask for them when you notify.