Canada has several programs designed to make homeownership more accessible for first-time buyers. Here's a complete overview of what's available.
Who Qualifies as a First-Time Home Buyer?
For most federal programs, a first-time home buyer is someone who has not owned a principal residence in the previous 4 calendar years. This "look-back" rule means even previous homeowners can re-qualify after 4 years.
Federal Programs
1. First Home Savings Account (FHSA)
The FHSA is the newest and most powerful tool. It's a registered account that combines RRSP tax deductions with TFSA tax-free withdrawals.
- Annual contribution limit: $8,000/year
- Lifetime contribution limit: $40,000
- Contributions are tax-deductible (like an RRSP)
- Withdrawals for a qualifying home purchase are tax-free (like a TFSA)
- You can open an FHSA even if you're not ready to buy — contributions accumulate
- Important: You must open the account at least 30 days before your first withdrawal
A couple can contribute $80,000 combined — potentially the largest single tax-advantaged tool available for a down payment.
2. Home Buyers' Plan (RRSP)
The HBP lets first-time buyers withdraw from their RRSP to fund a home purchase:
- Maximum withdrawal: $60,000 per person ($120,000 per couple) — increased from $35,000 in April 2024
- The withdrawal is tax-free at the time of withdrawal
- Must be repaid over 15 years (minimum 1/15th annually, or it's treated as income)
- RRSP funds must have been in the account for at least 90 days before withdrawal
3. First-Time Home Buyers' Tax Credit
A non-refundable federal tax credit of $10,000, which translates to a tax saving of $1,500 (at the 15% federal tax rate). It's claimed on your tax return in the year of purchase.
4. GST/HST New Housing Rebate
If you're buying a newly built home, you may qualify for a partial rebate of the GST/HST paid. The rebate is available on new homes priced up to approximately $450,000.
Provincial Programs
Ontario
- First-Time Home Buyer Land Transfer Tax Rebate: Up to $4,000 on provincial LTT, and up to $4,475 on Toronto's municipal LTT
- Effective for homes up to ~$368,000 provincially (full rebate)
British Columbia
- First-Time Home Buyers' Program: Full LTT exemption on homes priced at $500,000 or less, partial rebate up to $525,000
- BC also has various programs for new builds and affordable housing
Alberta
- No land transfer tax, so no rebate needed — buyers already save significantly vs. other provinces
Manitoba
- First-time buyers may qualify for a land transfer tax rebate of up to $4,500
Nova Scotia, PEI, New Brunswick
- Various programs at the municipal and provincial level — ask locally
30-Year Amortization for First-Time Buyers (New in 2024)
As of August 2024, first-time home buyers purchasing a newly built home can qualify for an insured mortgage with a 30-year amortization (up from 25 years). This reduces monthly payments and can help with affordability.
Building Your First Down Payment: A Strategy
Many first-time buyers combine multiple programs:
- Open an FHSA immediately — start accumulating tax deductions and growing the account
- Contribute to an RRSP and use the HBP when ready to buy
- Check provincial LTT rebates to reduce closing costs
- Claim the First-Time Home Buyers' Tax Credit on your tax return
Use Our Tools
- Affordability Calculator — see how much you qualify for
- CMHC Insurance Calculator — calculate your insurance premium
- Land Transfer Tax Calculator — estimate your LTT rebate
Ready to start your first home purchase? Contact us for personalized guidance.