Most first-time buyers know vaguely that “there are programs out there” to help them get into the market. What they often don’t know is exactly which ones apply to their situation, what the real numbers look like, and how to combine them effectively.
This is a plain-language breakdown of every first-time buyer incentive currently available in Ontario in 2026 — what each one is, what it’s worth, who qualifies, and how they work together. No fluff, just the information you actually need before you start making decisions.
One important note up front: the federal First-Time Home Buyer Incentive — the shared equity program — was discontinued in March 2024. It is no longer available. The programs below are what’s actually on the table right now.
1. First Home Savings Account (FHSA)
The FHSA is one of the most powerful savings tools available to first-time buyers in Canada right now. It combines the best features of an RRSP and a TFSA in a single account designed specifically for home buyers.
Contributions are tax-deductible — like an RRSP. That means every dollar you put in reduces your taxable income. Qualifying withdrawals are completely tax-free — like a TFSA. And unlike the Home Buyers’ Plan (see below), there is no repayment requirement. The money does not need to go back.
The annual contribution limit is $8,000, with a lifetime maximum of $40,000. You can carry forward up to $8,000 of unused room from one year to the next — so if you contribute $3,000 in year one, you can contribute up to $13,000 in year two.
- Must be a Canadian resident and a first-time home buyer
- Must be at least 18 years old and under 71
- Account must be open before the end of the year you want contribution room for
- Account can stay open for up to 15 years — if unused, funds transfer to an RRSP
2. Home Buyers’ Plan (HBP)
The Home Buyers’ Plan lets first-time buyers withdraw up to $60,000 from their RRSP tax-free to put toward a home purchase. For couples where both partners qualify, that’s up to $120,000 combined.
The key distinction from the FHSA: the HBP is essentially an interest-free loan from your future self. The money needs to be repaid back into your RRSP over 15 years, beginning the second year after your withdrawal. Each year you skip a payment, that year’s required amount gets added to your taxable income for that year.
The RRSP funds also need to have been sitting in your account for at least 90 days before you can withdraw them under the HBP.
- Must be a first-time home buyer as defined by CRA
- Must have a written agreement to buy or build a qualifying home
- RRSP funds must have been in the account for at least 90 days
- Home must be occupied as your principal residence within one year of purchase
- Can be used alongside the FHSA for the same purchase
The FHSA and HBP can be used together for the same purchase. A single buyer with both accounts maximized could access up to $100,000 in tax-advantaged funds toward a down payment. For a qualifying couple, that number reaches $200,000.
3. First-Time Home Buyers’ Tax Credit (HBTC)
The federal First-Time Home Buyers’ Tax Credit is a $1,500 non-refundable tax credit claimed on your federal income tax return in the year you purchase your home. It’s calculated as 15 percent of $10,000.
Non-refundable means it reduces the tax you owe — but if you don’t have federal tax payable that year, you won’t receive a cheque for the unused portion. Most buyers with employment income will have tax owing and can claim the full $1,500.
It won’t cover your closing costs on its own. But it’s available to every qualifying first-time buyer, it’s straightforward to claim, and there’s no reason to leave it on the table.
- Must be a first-time home buyer (no home ownership in the four preceding years)
- Applies to both new construction and resale homes
- Claimed in the tax year of purchase — not when you move in
- If two qualifying buyers, only one person claims the full amount
4. Ontario Land Transfer Tax Rebate
When you buy a home in Ontario, you pay provincial land transfer tax on closing. First-time buyers are eligible for a rebate of up to $4,000 on that tax. For homes priced below $368,000, the rebate covers the full land transfer tax — meaning you pay nothing. For homes above that threshold, you receive the full $4,000 rebate and pay the difference.
This rebate applies to both new construction and resale homes, and your lawyer applies it automatically at closing — you don’t need to file a separate claim after the fact.
- Must be a first-time home buyer — both buyers on title must qualify
- Must be at least 18 years old
- Must occupy the home as your principal residence within nine months of closing
- Applies to new construction and resale homes across Ontario
5. Toronto Municipal Land Transfer Tax Rebate (Toronto Purchases Only)
If you’re buying within the City of Toronto, you pay a second land transfer tax — the municipal land transfer tax — on top of the provincial one. Toronto is currently the only municipality in Ontario that charges this additional tax.
First-time buyers in Toronto are eligible for a municipal rebate of up to $4,475. For homes priced below $400,000, the rebate covers the full municipal land transfer tax. Combined with the provincial rebate, qualifying first-time buyers in Toronto can receive up to $8,475 in total land transfer tax savings.
- Applies only to purchases within the City of Toronto boundaries
- Same first-time buyer eligibility rules as the provincial rebate
- Applied at closing by your lawyer — no separate filing required
- Applies to both new construction and resale homes
How They Stack Together
These programs aren’t competing with each other — they’re designed to be used together. Here’s what the combined picture looks like for a qualifying first-time buyer purchasing a home in Toronto.
| Program | Type | Maximum Value |
|---|---|---|
| First Home Savings Account (FHSA) | Tax-free savings + deduction | Up to $40,000 lifetime |
| Home Buyers’ Plan (HBP) | Tax-free RRSP withdrawal | Up to $60,000 per person |
| First-Time Home Buyers’ Tax Credit | Federal tax credit | $1,500 |
| Ontario LTT Rebate | Closing cost reduction | Up to $4,000 |
| Toronto MLTT Rebate (if applicable) | Closing cost reduction | Up to $4,475 |
| Combined — Single Buyer (Toronto) | All programs | $100,000+ in tax-advantaged savings + $9,975 in closing cost relief |
The FHSA and HBP numbers represent the maximum possible savings assuming accounts are fully funded and maximized. The LTT rebates apply at closing regardless of how your savings are structured. Most first-time buyers won’t have every account maxed — but understanding the ceiling helps you plan toward it.
Important: These programs have specific eligibility rules, timing requirements, and filing procedures. The information above is educational. Before making decisions based on any of these programs, speak with a mortgage professional and your accountant to confirm what applies to your specific situation.
Frequently Asked Questions
Can I use the FHSA and the Home Buyers’ Plan at the same time?
Yes. The FHSA and the HBP are separate programs and can be used together for the same home purchase. A single buyer could access up to $40,000 tax-free from an FHSA and up to $60,000 from their RRSP via the HBP — a combined $100,000 in tax-advantaged savings toward a down payment.
What counts as a first-time home buyer in Canada?
For most federal programs, a first-time buyer is someone who has not owned a home — anywhere in the world — that they or their spouse or common-law partner lived in during the current year or in any of the four preceding calendar years. Even if you owned a home in the past, you may qualify again once that four-year window has passed.
Do both buyers need to be first-time buyers to claim the incentives?
For most of these programs — yes. For the FHSA, HBP, First-Time Home Buyers’ Tax Credit, and Ontario Land Transfer Tax Rebate, both people on title generally need to qualify as first-time buyers to access the full benefit. If only one partner qualifies, the benefits may be reduced or unavailable depending on the program. Your mortgage professional and lawyer can clarify your specific situation.
Is the Ontario Land Transfer Tax Rebate available for resale homes?
Yes. The Ontario provincial land transfer tax rebate of up to $4,000 applies to both newly constructed and resale homes. The Toronto municipal land transfer tax rebate also applies to both property types for qualifying first-time buyers purchasing within the City of Toronto.
Is the First-Time Home Buyer Incentive still available in 2026?
No. The federal First-Time Home Buyer Incentive — the shared equity mortgage program where the government co-invested in your home — was discontinued in March 2024. It is no longer available. The programs currently available are the FHSA, HBP, First-Time Home Buyers’ Tax Credit, and the land transfer tax rebates covered in this guide.
How do I claim the FHSA withdrawal for a home purchase?
A qualifying FHSA withdrawal is made through the financial institution holding your account. You’ll need to confirm you have a written agreement to buy or build a qualifying home, that you are a first-time buyer, and that the home will be your principal residence. Unlike the HBP, FHSA withdrawals do not need to be repaid. Your accountant can confirm the filing steps for your tax return.
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