Luckilly, there are some rebates in place for First-Time Home Buyers, to help save up for your downpayment.
When you buy property in Ontario, you pay Land Transfer Tax. First-time home buyers may be eligable for a refund of part or all of this tax, to a maximum of $2,000. If you are buying in the City of Toronto, there is an additional Land Transfer Tax with the Municipality. Fortunately, there is a rebate for this too, up to $3,725. For more information, and to see if you are eligable for the refund, visit the Government of Ontario.
The Home Buyers' Plan is a program that allows you to withdraw funds from your registered retirement savings plan (RRSP) to buy or build a qualifying home. You can use up to $25,000 of your RRSP savings ($50,000 for a couple) to help finance your downpayment on a home. The withdrawl is not taxable as long as you repay it within a 15 year period. To learn more, visit the Canada Revenue Agency.
The First-Time Home Buyers' Tax Credit was was introduced as part of 'Canada's Economic Action Plan' to assist Canadians in purchasing their first home. It is designed to help recover closing costs such as legal expenses, inspections, and land transfer taxes, so that you can save more for money your downpayment. At current taxation rates, the rebate works out to $750 for all first-time buyers. Learn more here.