Federal Programs for First-Time Home Buyers
First Home Savings Account (FHSA) Best New Program
The FHSA is Canada's most powerful new savings tool for first-time homebuyers, introduced in 2023. It combines the best features of an RRSP (tax-deductible contributions) and a TFSA (tax-free withdrawals for qualifying home purchase).
- Contributions are tax-deductible (like RRSP) — saves you $2,400/year in taxes at a 30% marginal rate
- Withdrawals for qualifying first home are completely tax-free (like TFSA)
- Investment growth inside the FHSA is tax-sheltered
- Unused room carries forward; account can be held for up to 15 years
- If you never buy, transfer to RRSP without affecting contribution room
- Must be Canadian resident, 18+, and a first-time homebuyer (no home owned in the current year or the preceding 4 calendar years)
Home Buyers' Plan (HBP)
The Home Buyers' Plan allows first-time buyers to withdraw from their RRSP to fund a home purchase, repaid over 15 years without immediate tax consequences.
- Withdraw up to $60,000 from your RRSP tax-free for a qualifying home purchase (increased from $35,000 in 2024)
- Couples can each withdraw $60,000 for a combined $120,000
- Repay over 15 years — 1/15th each year. If you don't repay, the amount is added to your taxable income that year
- RRSP funds must have been in the account for at least 90 days before withdrawal
- Can be combined with FHSA for maximum benefit
First-Time Home Buyers' Tax Credit (HBTC)
A non-refundable federal tax credit for qualifying first-time homebuyers or those purchasing for a person with a disability.
- Claim on your tax return in the year of purchase (Schedule 1, line 31270)
- Both you and your spouse/common-law partner can claim — split the $100 between you
- Property must be registered in your name in Canada
GST/HST New Housing Rebate
When buying a newly built home, you may qualify for a rebate on the GST/HST you paid, reducing the effective cost of a new build.
- Federal GST rebate: up to $6,300 for homes under $450,000; partial rebate for homes up to ~$524,000
- Provincial rebate available in provinces with HST (Ontario, BC, etc.)
- Also applies to substantially renovated homes
- Ontario new housing rebate can total $24,000+ combined federal and provincial
CMHC First-Time Buyer Benefits
CMHC insured mortgages (under 20% down payment) enable first-time buyers to enter the market with as little as 5% down. In late 2024, the federal government announced that first-time buyers purchasing new builds can access 30-year amortization on insured mortgages — reducing monthly payments and improving affordability.
Provincial First-Time Buyer Programs
| Province | Program | Benefit |
|---|---|---|
| Ontario | Land Transfer Tax Rebate | Up to $4,000 refund on provincial LTT; up to $4,475 on Toronto LTT |
| BC | First Time Home Buyers' Program | Full Property Transfer Tax exemption on homes under $835,000 |
| Alberta | No provincial LTT | No land transfer tax in Alberta (savings vs. other provinces) |
| Saskatchewan | First-Time Home Buyers Tax Credit | Provincial credit of $100 (saves ~$1,100) |
| Manitoba | First Time Home Buyers Tax Credit | Provincial credit up to $750 |
| Quebec | Home Buyers' Tax Credit | Provincial credit of $750 |
| Nova Scotia | Affordable Housing Program | Down payment assistance for eligible buyers |
Total First-Time Buyer Benefit Summary (Ontario Example)
| Program | Potential Benefit | Notes |
|---|---|---|
| FHSA (two people, max out over years) | $16,000+ tax savings | Based on 30% marginal rate on $40K each |
| RRSP Home Buyers' Plan | Defer tax on up to $120,000 | Interest-free loan from yourself |
| HBTC (First-Time Home Buyers' Tax Credit) | $1,500 | Federal non-refundable credit |
| Ontario LTT Rebate | Up to $4,000 | Rebate on provincial land transfer tax |
| Toronto LTT Rebate (if applicable) | Up to $4,475 | For Toronto purchases only |
| GST/HST Rebate (new build) | Up to $24,000+ | New builds only; federal + provincial |
Step-by-Step First-Time Buyer Checklist
- Open a FHSA immediately — start accumulating tax-deductible room even before you're ready to buy
- Get pre-approved — understand your maximum mortgage before starting to shop
- Run the stress test calculation — know your qualifying amount, not just your approval amount
- Calculate CMHC premium — factor this into your total cost of purchase
- Budget for closing costs — land transfer tax, legal fees ($1,500-$2,500), home inspection ($400-$600), appraisal, title insurance
- Use a mortgage broker — access the widest range of rates and products for your situation
- Claim all available tax credits — HBTC, FHSA withdrawals, GST rebate where applicable
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