Federal Programs for First-Time Buyers
First Home Savings Account (FHSA)
The FHSA is the most powerful tool available to first-time buyers in 2026. You can contribute up to $8,000 per year (lifetime maximum $40,000), and contributions are tax-deductible — similar to an RRSP. When you withdraw funds to buy a qualifying home, the withdrawal is tax-free — similar to a TFSA. It's the best of both worlds.
You can open an FHSA at most major banks and brokerages. The account can hold the same investments as an RRSP: GICs, mutual funds, ETFs, stocks, and bonds. If you're planning to buy within five years, open an FHSA immediately and start contributing.
Home Buyers' Plan (HBP)
The HBP allows first-time buyers to withdraw up to $60,000 from their RRSPs tax-free for a home purchase. If buying as a couple, each partner can withdraw $60,000, for a combined $120,000. The withdrawal must be repaid over 15 years, starting the second year after the withdrawal. If you miss a payment, that year's required amount is added to your taxable income.
You can use both the FHSA and HBP for the same purchase. Combined, a couple could potentially access $200,000+ in tax-advantaged funds for their down payment.
Home Buyers' Tax Credit (HBTC)
A non-refundable federal tax credit of $10,000, providing up to $1,500 in tax relief. Claimed on your tax return for the year you purchased the home. It's modest but automatic — don't forget to claim it.
Ontario Provincial Programs
Ontario Land Transfer Tax Rebate
First-time buyers in Ontario are eligible for a rebate of up to $4,000 on the provincial Land Transfer Tax. To qualify, you must be at least 18 years old, a Canadian citizen or permanent resident, and you must not have owned a home anywhere in the world previously. Your spouse also must not have owned a home during the period you've been spouses.
Toronto Municipal Land Transfer Tax Rebate
If you're buying in the City of Toronto, you face a second land transfer tax — the municipal LTT. First-time buyers can claim a rebate of up to $4,475 on this additional tax. Combined with the provincial rebate, Toronto first-time buyers can save up to $8,475 in land transfer taxes.
Calculating Your Total Benefit
For a first-time buyer couple purchasing a $700,000 home in Toronto:
- FHSA contributions (both partners, 3 years): up to $48,000 in tax-deductible, tax-free savings
- HBP withdrawals: up to $120,000
- Provincial LTT rebate: up to $4,000
- Municipal LTT rebate: up to $4,475
- Home Buyers' Tax Credit: $1,500 per eligible partner
Total potential benefit: $179,475 in tax-advantaged funds and rebates. The programs exist — use them.