The money programs that actually save you money: FHSA, the RRSP Home Buyers Plan, land transfer tax rebates, the GST rebate, and a real closing cost example.
Buying your first home in Ontario is expensive, but several government programs are built to give you money back or let you save tax-free. Used together, they can add up to tens of thousands of dollars. The catch is that each one has its own rules, and a few of the numbers changed recently. This guide explains each program with current 2026 figures, then shows a real closing cost example so you know what to actually budget. Nothing here is financial advice. It is a plain-English map of what exists and how the pieces fit.
| Program | What it gives you | 2026 limit |
|---|---|---|
| FHSA | Tax-deductible savings, tax-free growth and withdrawal for a first home | $8,000 per year, $40,000 lifetime |
| RRSP Home Buyers Plan | Borrow from your own RRSP tax-free for a down payment | $60,000 per person |
| First-Time Home Buyers Tax Credit | Non-refundable income tax credit at tax time | Up to $1,500 |
| Ontario land transfer tax rebate | Refund of provincial LTT at closing | Up to $4,000 |
| Toronto municipal LTT rebate | Refund of Toronto LTT, city buyers only | Up to $4,475 |
| First-Time Home Buyers GST Rebate | GST refund on a qualifying new build | Up to $50,000 |
The FHSA is the newest and, for most first-time buyers, the best account to start with. It combines the two features people usually have to choose between. Your contributions are tax-deductible like an RRSP, and your withdrawals for a first home are completely tax-free like a TFSA. You do not pay it back.
Here are the rules that matter for 2026:
The practical move is simple. Open an FHSA as early as you reasonably can, even with a small deposit, because opening it is what starts your contribution room. For where to hold one and how the top providers compare, see our FHSA Canada guide and our roundup of the best FHSA accounts in Canada.
The Home Buyers Plan lets you withdraw money from your own RRSP to buy or build a first home, without paying tax on the withdrawal. It is not free money. You pay it back into your RRSP over time. Think of it as an interest-free loan from your future self.
For the full withdrawal and repayment mechanics, see our RRSP Home Buyers Plan 2026 guide and the plain walkthrough in our Home Buyers Plan guide.
You do not have to choose. Since 2024 you can use both accounts for the same purchase. That means up to $40,000 from an FHSA plus up to $60,000 from the Home Buyers Plan, or up to $100,000 per person toward a down payment, if you have saved that much. For most people the smarter order is to fill the FHSA first, because its withdrawals are tax-free and never repaid, and use the HBP for the rest. We break down which to prioritise in our FHSA vs RRSP Home Buyers Plan comparison.
This one is a tax credit, not a savings account. When you file the tax return for the year you buy, you can claim the Home Buyers Amount of $10,000. Because it is a non-refundable credit at the lowest federal rate of 15 percent, it is worth up to $1,500 off your federal tax. It will not help with your down payment, but it is easy to claim and easy to forget, so put a note in your file for next tax season.
Everyone who buys property in Ontario pays provincial land transfer tax (LTT) at closing. It is charged on a sliding scale based on the price.
| Portion of purchase price | Ontario LTT rate |
|---|---|
| First $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| $400,001 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
First-time buyers get a rebate of up to $4,000. In practice that means no provincial land transfer tax at all on the first $368,000 of the price. To qualify you must be at least 18, a Canadian citizen or permanent resident, plan to move in within nine months, and never have owned a home anywhere in the world. Our Ontario land transfer tax guide works through the math city by city.
If your first home is inside the City of Toronto, you pay a second land transfer tax on top of the provincial one. For homes under $3 million the Toronto municipal LTT mirrors the provincial brackets almost exactly, which roughly doubles your land transfer tax bill compared with a home just outside the city.
The good news is that Toronto has its own first-time buyer rebate of up to $4,475, which covers the full municipal tax on a home priced up to $400,000. Stacked with the provincial rebate, a first-time buyer in Toronto can claim up to $8,475 back. Note that as of April 1, 2026 Toronto added higher municipal rates on luxury homes valued above $3 million, which does not affect most first-time buyers. See our Toronto land transfer tax breakdown for the details. Buying just outside Toronto, in a place like Burlington, avoids the municipal tax entirely.
Most first-time buyers purchase a resale home, and resale homes are generally exempt from GST, so this section will not apply to you. It matters only if you buy a new build or a substantially renovated home from a builder.
Announced in 2025, this rebate removes the full 5 percent federal GST on a qualifying new home priced up to $1 million, worth up to $50,000. Between $1 million and $1.5 million the rebate shrinks on a straight line, so a $1.25 million home would get roughly half, about $25,000. Above $1.5 million there is no rebate. It applies to purchase agreements signed on or after May 27, 2025 and before 2031, with construction beginning before 2031 and substantially complete before 2036. To count as a first-time buyer here you must be at least 18, a Canadian citizen or permanent resident, be the first person to live in the home, and not have lived in a home that you or your spouse owned in the current year or the previous four calendar years. Ontario has also signalled it intends to rebate its 8 percent provincial share of the HST on qualifying new first homes, which would add further savings. Confirm your exact eligibility with your builder and the CRA before you count on it.
If your new home does not qualify for the first-time buyer rebate above, the older new housing rebate may still apply. It refunds 36 percent of the 5 percent federal GST on homes priced up to $350,000, phasing out to zero by $450,000, and Ontario adds a rebate of 75 percent of its 8 percent provincial portion, up to a maximum of $24,000. Our GST and HST new housing rebate guide and our Canada new housing rebate page explain how to claim it.
Estimate only, for homes under $3 million. Confirm final figures with your real estate lawyer.
Here is a worked example so the numbers feel concrete. Assume a first-time buyer purchases a $650,000 resale freehold home in Ontario, outside Toronto, with 10 percent down. Because it is a resale home there is no GST. These are typical figures and ranges, not fixed prices.
First, the Ontario land transfer tax on $650,000 works out to $9,475. After the $4,000 first-time buyer rebate, you owe $5,475.
| Closing cost | Estimate | Notes |
|---|---|---|
| Ontario LTT after rebate | $5,475 | $9,475 tax minus the $4,000 rebate |
| Legal fees and disbursements | $1,800 | Typically $1,500 to $2,500 |
| Title insurance | $400 | One-time, roughly $300 to $500 |
| Home inspection | $500 | Optional but strongly recommended |
| Appraisal | $300 | If your lender requires one |
| PST on mortgage insurance | $1,451 | Ontario charges 8% PST on the CMHC premium, paid at closing |
| Property tax and utility adjustments | Varies | Reimbursing the seller for prepaid amounts |
| Approximate total | About $10,000 | On top of your down payment |
A note on that mortgage insurance line. With less than 20 percent down, your lender requires mortgage default insurance. The premium itself is added to your mortgage, but Ontario charges 8 percent provincial sales tax on that premium and you must pay the tax at closing in cash. On this example, a $585,000 mortgage with a premium of about $18,135 carries roughly $1,451 in PST. This is the closing cost first-time buyers most often forget. For a full city-by-city breakdown, see our Burlington home buying costs page and the GTA home buying costs guide.
KOHO is a no monthly fee account with the Easy plan that you can use to park your down payment savings and earn interest while you build toward a home. New users who open an account and set up direct deposit can qualify for the current welcome offer. Check the live terms on the next page before you commit.
See the current KOHO offerCosts and programs are the same across Ontario, but land transfer tax bills and local prices differ. Start with the guide for your city: