First-time homebuyer programs in Toronto and Ontario

The Canadian and Ontario governments offer four major programs specifically designed for first-time buyers, and the trick most people miss is that you can use them together. The FHSA, the RRSP Home Buyers' Plan, the Land Transfer Tax rebate, and the First-Time Home Buyer's Tax Credit are not either-or choices. I run through all four with every first-time client. The combined benefit usually runs $30K to $50K depending on the purchase.

First Home Savings Account (FHSA)

The FHSA is the newest and most powerful first-time buyer program. Launched in 2023, it combines the best features of an RRSP and a TFSA:

• Contributions are tax-deductible (like an RRSP), reducing your tax bill in the year you contribute
• Withdrawals for a home purchase are tax-free (like a TFSA), with no requirement to pay it back
• Contribution limit: $8,000 per year, up to $40,000 lifetime
• Unused contribution room carries forward (up to $8,000)
• Account can stay open 15 years or until you turn 71, whichever comes first

RRSP Home Buyers' Plan (HBP)

The HBP lets you withdraw up to $60,000 from your RRSP to buy a qualifying first home, tax-free, but you have to pay it back within 15 years. Couples can each withdraw $60,000, for a combined $120,000.

Key points:

• Must be a first-time buyer (or haven't owned in 4 years)
• Funds must be in the RRSP at least 90 days before withdrawal
• Repayments start 2 years after the withdrawal, spread over 15 years
• Missed repayments are added to your taxable income for that year

FHSA vs. HBP: which should you use?

If you qualify for both, the FHSA is generally better because you don't have to pay it back. But there's no reason to choose. You can use both, stacking up to $100,000 ($40k FHSA + $60k HBP) from a single person, or $200,000 for a couple.

First-Time Home Buyer Tax Credit (HBTC)

A non-refundable federal tax credit of up to $1,500 (15% × $10,000). It's claimed on your tax return in the year you buy. Simple to claim, just make sure your accountant knows you bought.

Ontario Land Transfer Tax Rebate

First-time buyers in Ontario get up to $4,000 refunded from their provincial land transfer tax. On top of that, first-time buyers in Toronto get up to $4,475 refunded from the municipal land transfer tax, so up to $8,475 in total rebates if you're buying in Toronto.

GST/HST New Housing Rebate

Buying a new-build (new construction, not resale)? You may be eligible for a partial GST/HST rebate, which reduces the tax you pay on the purchase price. Your lawyer handles this at closing.

First-Time Home Buyer Incentive (FTHBI)

Note: The federal FTHBI shared-equity program ended in March 2024. It's no longer accepting new applications. If someone references it as currently available, their information is out of date.

Stacking it all together

A typical first-time buyer in Toronto might use:

• FHSA: $40,000 tax-free toward down payment
• RRSP HBP: $40,000-$60,000 as additional down payment
• LTT Rebate (Ontario + Toronto): $8,475
• HBTC: $1,500 tax credit

That's roughly $100,000 in down payment ammunition plus $10,000 in rebates and credits, all just for being a first-time buyer.

Who qualifies as a "first-time buyer"?

Definitions vary slightly by program, but generally:

• FHSA: You (and your spouse/common-law partner) haven't owned a home that was your principal residence in the current year or the previous 4 calendar years.
• HBP: Same 4-year rule.
• Ontario LTT rebate: You've never owned a home anywhere in the world. Your spouse's ownership history counts against you if you were married/common-law when they owned.

Frequently Asked Questions

Use every program you qualify for

Most first-time buyers leave thousands of dollars on the table because nobody mapped the programs for them. Send me a note with your situation and I'll show you exactly which ones apply to you, in what order, and how much each is worth in your specific case.