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Everything Canadian first-time buyers need to know: FHSA, HBP, land transfer tax rebates, CMHC insurance, and how to choose the right bank and province.
First Home Savings Account: contribute up to $8,000/year (lifetime $40,000), tax-deductible contributions, tax-free withdrawals for a first home.
Home Buyers' Plan: withdraw up to $35,000 tax-free from RRSP for a first home. Must repay over 15 years.
Mortgage pre-approval shows sellers you're serious and locks in your interest rate for 90–120 days while you shop.
LTT, legal fees, inspection, title insurance. Budget 1.5–4% of purchase price depending on province.
Ontario offers up to $4,000 rebate. Toronto adds up to $4,475. BC offers exemption up to $835K. Alberta/YT/NWT/NU: $0 LTT, no rebate needed.
Mandatory in Canada. They handle title transfer, review contracts, and coordinate closing. Budget $1,200–$2,000.
Never waive this. Budget $400–$700 for a certified inspector. Critical for identifying structural or mechanical issues.
If your down payment is under 20%, CMHC mortgage default insurance is mandatory. Premium is 2.8–4% added to your mortgage.
| Province | LTT (Before Rebate) | FTB Rebate | Net LTT |
|---|---|---|---|
| Alberta | $0 | N/A | $0 |
| Saskatchewan | $0 | N/A | $0 |
| Yukon / NWT / Nunavut | $0 | N/A | $0 |
| Ontario | $6,475 | -$4,000 | $2,475 |
| Toronto (ON MLT added) | $12,950 | -$8,475 | $4,475 |
| BC | $8,000 | Up to -$8,000 (under $835K) | $0 (if eligible) |
The First Home Savings Account (FHSA) is arguably the most powerful savings tool for first-time buyers introduced in recent years. You can contribute up to $8,000 per year (lifetime maximum $40,000), deduct contributions from taxable income like an RRSP, and withdraw funds tax-free for a qualifying home purchase. Unlike the RRSP Home Buyers' Plan, FHSA withdrawals don't need to be repaid. Opening an FHSA as early as possible — even if you contribute minimally — starts the clock on unused room that can be carried forward.
The Home Buyers' Plan (HBP) allows first-time buyers to withdraw up to $35,000 from their RRSP (or $70,000 for a couple) tax-free for a qualifying first home. The amount must be repaid over 15 years starting the second year after the withdrawal. Combining the FHSA and HBP can provide a significant down payment boost without triggering income tax.
Where you buy matters enormously for your land transfer tax bill. Alberta, Saskatchewan, and the three territories charge no LTT — a first-time buyer in Calgary or Whitehorse saves thousands compared to an equivalent buyer in Ontario or BC. In Ontario, the first-time buyer rebate covers the first $4,000 of provincial LTT. Toronto first-time buyers get an additional rebate on the municipal LTT.
CMHC mortgage default insurance is required if your down payment is less than 20% of the purchase price. The premium ranges from 2.8% (15–19.99% down) to 4% (5–9.99% down) and is added to your mortgage amount, accruing interest over the amortization period. On a $500,000 home with 10% down, CMHC insurance adds approximately $13,500 to your mortgage — important to factor into affordability calculations.
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