Buying your first home in Ontario is expensive. The government acknowledges this with several programs designed to reduce the upfront cost. Here’s what’s currently available and how to access it.
First Home Savings Account (FHSA)
Introduced in 2023, the FHSA is the most powerful first-time buyer tool available to Canadians. It combines the best features of an RRSP and TFSA:
- Contributions are tax-deductible (like an RRSP)
- Withdrawals for a qualifying home purchase are tax-free (like a TFSA)
- Annual contribution limit: $8,000
- Lifetime contribution limit: $40,000
- Unused contribution room carries forward (up to $8,000 per year)
If you’re planning to buy a home in the next 5-10 years and haven’t opened an FHSA, open one today. Every year you don’t is $8,000 of tax-free space you lose permanently.
Home Buyers’ Plan (HBP)
The HBP lets you withdraw up to $35,000 from your RRSP tax-free for a qualifying home purchase ($70,000 for couples). You must repay the amount to your RRSP over 15 years, with the first repayment due two years after the withdrawal year.
The HBP and FHSA can be used together — a couple could access up to $110,000 ($40,000 FHSA each + $35,000 HBP each) tax-free for a down payment.
Land Transfer Tax Rebates
Ontario charges a provincial Land Transfer Tax (LTT) on all real estate purchases. First-time buyers receive a rebate of up to $4,000 on the provincial LTT.
Toronto buyers also pay the Toronto Municipal Land Transfer Tax (MLTT). First-time Toronto buyers receive a rebate of up to $4,475 on the MLTT.
Combined: Toronto first-time buyers can receive up to $8,475 in LTT rebates. The rebate is applied at closing — you don’t pay and wait for a refund.
GST/HST New Housing Rebate
If you’re buying a newly built home, you may be eligible for a rebate of the HST paid on the purchase. The federal component rebates 36% of the 5% GST on homes up to $350,000 (phased out to $450,000). Ontario’s provincial HST component has a separate rebate for new primary residences. Your lawyer will handle the application at closing.
First-Time Home Buyer Incentive (FTHBI)
Note: As of 2024, the federal government closed the FTHBI program to new applications. If you hear about it, it is no longer available.
Putting It Together
A first-time buying couple in Ontario could combine: FHSA ($80,000 combined) + HBP ($70,000 combined) + LTT rebates ($8,475 in Toronto) + GST rebate on new construction. That’s a substantial amount of government support — but only if you’ve been using these accounts. Start early.
