First-time home buyers in Ontario have access to several programs that meaningfully reduce the upfront cost of purchasing. The most valuable for most buyers: the provincial land transfer tax rebate (up to $4,000), the Toronto municipal land transfer tax rebate for Toronto purchases (up to $4,475), the First Home Savings Account (FHSA), the Home Buyers' Plan (RRSP withdrawal), and the First-Time Home Buyers' Tax Credit. Used together strategically, these programs can save first-time buyers $15,000–$25,000 or more on their first purchase. This guide covers each benefit, what you get, and how to qualify.
Understanding which programs you qualify for before you start searching helps you set a realistic budget. The benefits listed here apply to resale homes, new construction, and condos equally, unless noted otherwise. For how these programs interact with the overall purchase process, see steps to buying a home in the GTA.
Ontario Land Transfer Tax Rebate
Every Ontario home purchase is subject to provincial land transfer tax. First-time buyers receive a rebate of up to $4,000 on provincial land transfer tax. This rebate is applied at closing by your lawyer — you don't claim it separately on your taxes.
The rebate eliminates provincial LTT entirely on purchases up to approximately $368,000. On purchases above that threshold, the rebate reduces (but doesn't eliminate) the tax. For a $700,000 purchase, provincial LTT is $10,475 — after the $4,000 rebate, you pay $6,475.
To qualify: Canadian citizen or permanent resident, at least 18 years old, never previously owned a home anywhere in the world, spouse cannot have owned a home during the relationship, property must become your principal residence. See how Ontario land transfer tax is calculated for full rate details.
Toronto Municipal Land Transfer Tax Rebate
Buyers purchasing within the City of Toronto pay a second land transfer tax (the MLTT) at the same rates as the provincial tax. First-time Toronto buyers receive an additional rebate of up to $4,475 on the MLTT.
Combined with the provincial rebate, first-time Toronto buyers can save up to $8,475 in land transfer taxes. On a $700,000 Toronto purchase, combined LTT without rebates is $20,950. With both first-time buyer rebates, you pay approximately $12,475. The eligibility criteria are the same as the provincial rebate, and your lawyer applies both at closing. See what the Toronto municipal land transfer tax is for details on who pays it.
First Home Savings Account (FHSA)
The FHSA is the most powerful savings tool available to first-time buyers in Canada. Introduced in 2023, it combines the tax advantages of both an RRSP and a TFSA:
- Contributions are tax-deductible (like an RRSP) — reducing your taxable income in the year you contribute
- Withdrawals for a qualifying home purchase are completely tax-free (like a TFSA) — you don't pay tax on the growth
- Annual contribution limit: $8,000 per year
- Lifetime contribution limit: $40,000
- Unused contribution room carries forward (max $8,000/year carryforward)
Example: You open an FHSA today and contribute $8,000/year for 5 years, investing in a balanced ETF that grows at 6%/year. At withdrawal, you'd have roughly $47,000 — all tax-free at purchase. The $40,000 in contributions would also have reduced your taxable income by $40,000 over those 5 years, saving an additional $10,000–$20,000 in income tax depending on your marginal rate.
To qualify: Canadian resident, at least 18 years old, first-time buyer (did not own a principal residence at any time in the current year or the preceding 4 calendar years). The account must be opened with a bank, broker, or credit union offering FHSAs — available through most major Canadian financial institutions. Learn more at CRA's FHSA page.
Home Buyers' Plan (HBP)
The Home Buyers' Plan allows first-time buyers to withdraw up to $60,000 from their RRSP tax-free and use those funds for a qualifying home purchase. If you're purchasing with a partner who also qualifies as a first-time buyer, you can each withdraw $60,000 — a combined $120,000 from your RRSPs.
Key rules:
- The RRSP funds must have been in the account for at least 90 days before withdrawal
- You have 2 years after the year of purchase to start repayments, then 15 years to repay the full amount
- Each year's required repayment is the total withdrawn divided by 15. If you don't repay in a given year, that year's repayment amount is added to your income and taxed
- You must be a Canadian resident and a first-time buyer (same 4-year rule)
- The home must be your principal residence, occupied within one year of purchase
You can use both the FHSA and the HBP on the same home purchase — the two programs can be combined. See our detailed guide on what the Home Buyers' Plan is and how it works.
First-Time Home Buyers' Tax Credit (HBTC)
The HBTC is a $10,000 non-refundable federal tax credit available to first-time buyers in the year of purchase. At the 15% federal tax rate, it translates to a $1,500 reduction in federal income tax owing. If you and a co-purchaser both qualify as first-time buyers, you can split the credit (combined maximum $10,000).
Claim it on line 31270 of your T1 general tax return for the year you purchased. The credit reduces tax owing — if you owe less tax than $1,500, you receive the difference as a refund only up to the amount of tax you actually owe (it's non-refundable). See what the first-time home buyer tax credit is for full details.
Minimum Down Payment Rules for First-Time Buyers
First-time buyers in Canada are subject to the same minimum down payment rules as all buyers. As of December 2024:
| Purchase price | Minimum down payment |
|---|---|
| Under $500,000 | 5% of purchase price |
| $500,000 – $1,499,999 | 5% of first $500K + 10% of the remainder |
| $1,500,000 or more | 20% of purchase price |
For a $750,000 purchase: 5% × $500,000 ($25,000) + 10% × $250,000 ($25,000) = $50,000 minimum down (6.67%). For a $1,000,000 purchase: $25,000 + 10% × $500,000 ($50,000) = $75,000 minimum down (7.5%). Properties over $1.5M require 20% down regardless of first-time buyer status.
If your down payment is less than 20%, you must purchase CMHC mortgage default insurance. The premium (2.8–4.0% of the mortgage amount) is added to your mortgage balance, and Ontario charges PST on the premium at closing.
The First-Time Home Buyer Incentive (FTHBI) — Cancelled
The federal First-Time Home Buyer Incentive (FTHBI), which provided a shared-equity mortgage of 5–10% from the federal government, was cancelled effective March 21, 2024. No new applications are accepted. If you've seen it referenced in older guides or resources, it is no longer available.
Ready to start your search? Browse homes for sale across the GTA on Condohill and filter by price to see what your budget can reach with first-time buyer programs applied.
FAQ
Can I use both the FHSA and the Home Buyers' Plan when buying a home?
Yes. You can use both programs on the same qualifying home purchase. Combined, they allow you to access up to $40,000 from your FHSA (tax-free) and up to $60,000 from your RRSP through the HBP, for a potential $100,000 in tax-advantaged funds toward your down payment. Both must meet their own eligibility conditions.
What is the first-time buyer rule about owning a home previously?
For most first-time buyer programs in Canada, "first-time buyer" means you have not owned a principal residence that you occupied at any time in the current calendar year or in any of the preceding 4 calendar years. If you owned a home 6 years ago, you may qualify again. The rules are identical for federal programs (FHSA, HBP, HBTC) and the provincial land transfer tax rebate; the Toronto MLTT rebate has similar criteria.
Do first-time buyer programs apply to new construction and condos?
Yes. All programs — LTT rebates, FHSA, HBP, and HBTC — apply to resale homes, new construction, and condo purchases equally, as long as the property becomes your principal residence and you meet the eligibility criteria for each program.
What is the maximum land transfer tax rebate for first-time buyers in Toronto?
First-time buyers purchasing within the City of Toronto can receive up to $4,000 from the provincial land transfer tax rebate and up to $4,475 from the Toronto municipal land transfer tax rebate — a combined maximum of $8,475. Both rebates are applied by your lawyer at closing without a separate application.