First-Time Buyer Tax Credits in Canada (2025)

First-Time Buyer Programs in Canada

Canada offers several federal and provincial programs specifically for first-time homebuyers. Used together, they can reduce your effective tax burden and increase your purchasing power significantly. Here's every program available as of 2025.

Federal Programs

1. First Home Savings Account (FHSA)

Introduced in 2023, the FHSA is a registered account combining RRSP and TFSA features for first-time homebuyers:

• Annual contribution room: $8,000
• Lifetime contribution limit: $40,000
• Tax deduction: Contributions are deductible (like an RRSP)
• Tax-free growth: Investment income grows tax-free (like a TFSA)
• Tax-free withdrawal: Withdrawals for a qualifying first home purchase are tax-free
• Eligible to open: Canadian resident, 18–71, first-time buyer who intends to buy within 15 years

The FHSA is the most powerful first-time buyer tool Canada has ever offered. If you're planning to buy within 5–10 years, open an FHSA now and contribute the maximum each year. $8,000/year × 5 years = $40,000 of contributions that are fully deductible AND withdrawn tax-free.

2. Home Buyers' Plan (HBP)

The HBP lets you withdraw up to $60,000 from your RRSP tax-free to use as a down payment (increased from $35,000 in 2024 Budget). You must repay the withdrawal to your RRSP over 15 years (starting 2 years after withdrawal). If combined with a spouse/partner, you can withdraw up to $120,000 total.

3. Home Buyers' Tax Credit (HBTC)

A non-refundable federal tax credit of $100 (as of 2022 Budget), which generates approximately $1,500 in tax savings (at the 15% federal rate). Claim on your tax return in the year you buy. Both first-time buyers in a couple can claim it.

Provincial Programs

Ontario: Land Transfer Tax Rebate

First-time buyers in Ontario receive a rebate on provincial LTT up to $4,000 and on Toronto's municipal LTT up to $4,475. These rebates are applied at closing — you never write the cheque for that amount.

BC: First-Time Buyer PTT Exemption

Homes priced at $500,000 or less receive a full PTT exemption. Partial exemption between $500,000 and $525,000. Maximum saving: approximately $8,000.

Other Provinces

• Manitoba: LTT rebate up to $4,500 for first-time buyers
• PEI: Land transfer tax rebate up to $2,000
• New Brunswick: No specific FTB program

First-Time Buyer Savings Calculator

Related: Ontario closing costs, BC closing costs, total home buying cost.