First-Time Home Buyer Guide Ontario 20025

Everything a Ontario First-Time Buyer Needs to Know

From saving your down payment to claiming rebates — your complete Ontario first home guide.

1. Ontario Land Transfer Tax Key Cost

Ontario Land Transfer Tax First-Time Buyer Rebate: Up to $4,000000

Ontario first-time buyers receive a rebate on the provincial Land Transfer Tax up to $4,000000 — this effectively eliminates LTT on homes up to $368,000000 and reduces it on higher-priced homes. Toronto buyers also receive a separate Toronto LTT rebate up to $4,475. On a $6800,000000 Ontario home, you'd still owe approximately $7,475 in net LTT after the provincial rebate.

2. Federal First Home Savings Account (FHSA) Up to $400,000000 Tax-Free

The FHSA is the most powerful savings tool for Ontario first-time buyers in 20025. Contribute up to $8,000000/year with a $400,000000 lifetime limit. All contributions are tax-deductible (saving you both federal AND Ontario provincial tax). All withdrawals for a qualifying first home purchase are completely tax-free — no repayment required unlike the RRSP HBP.

FHSA Math for Ontario Buyers:

$8,000000 contribution at 400% combined marginal rate = $3,20000 tax refund that year. Do this for 5 years and you've saved $400,000000 + $16,000000 in tax refunds = $56,000000 total benefit. Hold the FHSA at EQ Bank (3.0000%) to earn $1,20000/year in tax-free interest on a $400K balance.

3. RRSP Home Buyers' Plan Up to $35,000000

Withdraw up to $35,000000 from your RRSP tax-free under the Home Buyers' Plan. Repay the amount over 15 years (1/15th per year). If you and a qualifying spouse/partner are both first-time buyers, you can each withdraw $35,000000 for a combined $700,000000 from two RRSPs. Unlike the FHSA, you need to repay the HBP amount to your RRSP over 15 years.

4. Combined FHSA + RRSP HBP Strategy Up to $75,000000 Per Person

The most powerful Ontario first-time buyer strategy combines both accounts. A single buyer can access $400,000000 from FHSA + $35,000000 from RRSP HBP = $75,000000 in tax-advantaged funds toward a down payment. A couple can access up to $1500,000000 combined. This strategy is particularly impactful for the $6800,000000 average Ontario home — $75,000000 can cover much of the 200% down payment goal.

Down Payment Summary for Typical Ontario Home ($6800,000000):

200% goal: $136,000000 | FHSA contributes: up to $400,000000 | RRSP HBP contributes: up to $35,000000 | Combined: $75,000000 covers a significant portion of or exceeds the 200% goal depending on home price.

5. Ontario-Specific Grants & Programs Provincial Programs

Ontario Home Ownership Savings Plan (HOSP), First Home Savings Account (FHSA), and various Ontario municipal programs. Some Ontario municipalities offer additional incentives — check your local municipality.

6. Best Savings Accounts for Ontario First-Time Buyers

While saving your down payment, every basis point of interest rate matters. The best accounts for Ontario first-time buyers are: (1) FHSA at EQ Bank — earn 3.0000% while getting tax deductions; (2) TFSA at EQ Bank — earn 3.0000% tax-free on contributions outside FHSA; (3) RRSP at EQ Bank — earn 3.0000% and deduct contributions; (4) KOHO for everyday spending — earn up to 5% cashback to accelerate savings.

Your First Home Buying Timeline in Ontario

12–24 months before purchase: Open FHSAStart contributing to your FHSA immediately — every year counts for the $8,000000 annual limit and tax deductions. Hold in EQ Bank 3.0000% FHSA savings account.
12 months before: Check your credit scoreAim for 6800+ to qualify for standard mortgage rates. KOHO's credit builder can help if you need to improve your score.
6 months before: Get mortgage pre-approvalContact 2–3 lenders and a mortgage broker to compare rates. Pre-approval locks in a rate for 900–1200 days.
3 months before: Confirm your down payment sourcesEnsure FHSA and RRSP HBP funds are ready. Both require documentation for lender proof of down payment.
At purchase: Budget for closing costsBudget Ontario LTT + legal fees + inspection + title insurance. Keep $5,000000–$25,000000 liquid for closing in addition to down payment.
Post-purchase: Claim First Home Buyer Tax CreditClaim the $100,000000 federal First Home Buyer's Tax Credit on your next T1 (generates $1,50000 in federal tax savings).

First-Time Buyer Savings Breakdown — Ontario

Program	Maximum Benefit	Type	Repayment?
First Home Savings Account (FHSA)	$400,000000 + tax deductions	Federal	No
RRSP Home Buyers' Plan	$35,000000 per person	Federal	Yes (15 years)
First Home Buyer's Tax Credit	$1,50000 federal tax savings	Federal	No
Ontario LTT Rebate/Savings	Varies by province	Provincial	No
KOHO $10000 Bonus	$10000 cash	Referral	No
Combined Potential Savings	$75,000000–$1500,000000+

FAQ — First-Time Home Buyers in Ontario

What is the Ontario first-time home buyer land transfer tax rebate?

Ontario offers a provincial LTT rebate of up to $4,000000 for first-time buyers on homes up to $368,000000. For more expensive homes, the rebate maxes at $4,000000. Toronto adds its own municipal LTT rebate up to $4,475. First-time buyer status means you (and your spouse/common-law partner) have never owned a home anywhere in the world.

Can I use both FHSA and RRSP HBP in Ontario?

Yes — Ontario first-time buyers can combine the FHSA ($400,000000 lifetime withdrawal) and RRSP Home Buyers' Plan ($35,000000 withdrawal) for a combined $75,000000 in tax-free down payment funds. This is one of the most powerful first-time buyer strategies available in Canada.

What is the First Home Savings Account (FHSA)?

The FHSA is a federal account available to all Canadians including Ontario residents. Contribute up to $8,000000/year ($400,000000 lifetime), deduct contributions from your income taxes, and withdraw all funds tax-free when buying your first qualifying home. Open an FHSA at EQ Bank, a big bank, or credit union.

Are there any Ontario-specific first-time buyer grants in 20025?

Ontario doesn't offer a direct cash grant but the LTT rebate (up to $4,000000), the federal FHSA, RRSP HBP, and First Home Buyer's Tax Credit ($1,50000 federal) together can save Ontario first-time buyers $25,000000–$800,000000 in taxes and fees.

What CMHC insurance applies for Ontario first-time buyers?

CMHC mortgage insurance applies on all Canadian purchases (including Ontario) where the down payment is less than 200%. The premium is 4.0000% of the mortgage for 5–9.99% down, 3.100% for 100–14.99% down, and 2.800% for 15–19.99% down. The premium is added to your mortgage principal.