Buying a first home in Ontario can feel impossible right now, but there actually are a lot of programs and tax breaks designed to help first-time buyers and families. The tricky part is that the rules keep changing, and many people only hear about one or two of them.
Here’s a clear, up-to-date overview of what’s available as of late 2025, with links so that you can check them out yourself.
1. Federal savings + tax programs for first-time buyers
1.1 First Home Savings Account (FHSA)
The FHSA is one of the most powerful tools first-time buyers have right now.
What it is
A registered account that combines the best parts of an RRSP and a TFSA:
- Contributions are tax-deductible (like an RRSP).
- Money grows tax-free.
Withdrawals to buy a qualifying first home are also tax-free (like a TFSA). CHECK IT OUT
Key numbers:
Key numbers
- Up to $8,000 per year in contribution room.
- Lifetime limit $40,000 per person. GetSmarterAboutMoney.ca+1
- You can keep an FHSA open for up to 15 years after opening it.
If both partners are first-time buyers, you can each have an FHSA, so a couple can shelter up to $80,000 plus any investment growth before buying.
LINK: How the First Home Savings Account (FHSA) works
1.2 RRSP Home Buyers’ Plan (HBP)
If you’ve already been saving in RRSPs, the Home Buyers’ Plan lets you “borrow” from yourself.
What it is
- You can withdraw up to $60,000 per person from your RRSP tax-free, as long as it goes toward buying or building a qualifying home. CHECK IT OUT
- A couple could access up to $120,000 this way. READ THIS ARTICLE
- You must start repaying over 15 years, usually at least 1/15 of the amount withdrawn per year, or the shortfall gets added to your taxable income.
Pro tip: You can combine FHSA + HBP: contribute to both, deduct the contributions, then use FHSA and RRSP withdrawals together for the same purchase (as long as each program’s rules are met).To qualify as a first-time buyer under the HBP, you generally must not have lived in a home you or your spouse owned in the current year or past four calendar years. FIND OUT MORE
1.3 First-Time Home Buyers’ Tax Credit (Home Buyers’ Amount)
Buying your first home comes with a lot of “extras” — legal fees, home inspection, land transfer tax, moving costs. The federal government gives a small tax break to help with this.
- On your tax return, you can claim up to $10,000 as the home buyers’ amount (Line 31270).
- At the lowest federal tax rate (15%), that works out to up to $1,500 off your tax bill. CMHC+1
- You must be a first-time buyer (no home you or your spouse owned in the year or previous four years, with some exceptions for disability). Canada+1
If you buy with a spouse or common-law partner, you can share the $10,000 claim, but the combined total can’t exceed that amount. CHECK IT OUT
2. Tax rebates on new homes (GST/HST)
If you’re buying new construction (or substantially renovated homes), there are extra rebates on the sales tax. This is especially relevant in Ontario where HST is 13%.
2.1 Existing GST/HST New Housing Rebate
The long-standing GST/HST New Housing Rebate lets buyers recover part of the GST or federal portion of HST on new or substantially renovated homes used as a primary residence. Canada
Eligibility is detailed, but in general:
- The home must be for you or a relation as a primary residence.
- Price and usage conditions apply.
- There are also provincial new housing rebates for the provincial portion of HST in some provinces, including Ontario. CHECK IT OUT
2.2 New federal FTHB GST Rebate (announced May 2025)
In May 2025, the federal government announced a new First-Time Home Buyers’ GST Rebate for new homes, aimed specifically at first-time buyers purchasing from a builder. CHECK IT OUT
Key points from the federal proposal:
- For qualifying first-time buyers, the rebate can cover up to $50,000 of the GST (federal part of HST) paid on a new home or owner-built home.
- Fully available on new homes up to $1.5 million, with specific conditions around date of purchase agreement (generally on or after May 27, 2025) and occupancy dates.
This is still in the process of being fully implemented through legislation, so buyers should check the current status with their lawyer or accountant before relying on it.
2.3 Ontario’s matching 8% HST rebate for first-time buyers (coming Soon)
In response, Ontario has announced plans to fully rebate the 8% provincial portion of HST on qualifying new homes for first-time buyers: CHECK IT OUT
- A full rebate of the 8% provincial HST on newly constructed or substantially renovated homes valued up to $1 million for eligible first-time buyers.
- The provincial rebate would be phased out between $1 million and $1.5 million, mirroring the federal structure. Sorbara Law+1
- Combined with the federal FTHB GST rebate, some first-time buyers of new homes in Ontario could see up to $130,000 in total HST/GST relief once both are fully in force.
Again, these measures are tied to recent budgets and fall economic statements, so it’s wise to confirm whether they’ve been passed into law at the time you’re buying.
3. Ontario-specific help: land transfer tax and rebates
Buying in Ontario means facing land transfer tax (LTT) on top of your down payment and closing costs — but first-time buyers get a meaningful break.
3.1 Ontario Land Transfer Tax Refund (province-wide)
Ontario offers a land transfer tax refund for first-time homebuyers of up to $4,000: CHECK IT OUT
- Available on both new and resale eligible homes.
- A $4,000 rebate fully covers LTT on homes priced up to about $368,000; above that price, you still get the full $4,000, but you pay the difference.
- You must:
- Be at least 18 years old.
- Have never owned a home anywhere in the world and intend to occupy the property as your principal residence within a specified period.
- Usually, your spouse must also not have owned a home while being your spouse.
- Refund requests must generally be made within 18 months after the transfer date.
The official rules live on the Ontario government’s Land Transfer Tax page and in the Refund Affidavit form. LAND TRANSFER TAX CALCULATOR
3.2 Extra rebate if you buy in the City of Toronto
If your first home is in the City of Toronto, you face a second tax: the Municipal Land Transfer Tax (MLTT). The good news: there’s also a Toronto MLTT rebate for first-time buyers.
- The City of Toronto offers a First-Time Purchaser Rebate on MLTT, currently up to about $4,475, which fully covers municipal LTT on homes up to $400,000 and partially offsets tax on higher prices. CHECK IT OUT
- This municipal rebate can be stacked with the provincial $4,000 LTT refund, significantly reducing closing costs for first-time buyers in Toronto.
Toronto also recently added a Municipal Non-Resident Speculation Tax (MNRST) on certain purchases by foreign buyers, which is separate from first-time buyer support but is part of the overall tax picture. READ THIS ARTICLE
4. Mortgage insurance and minimum down payments (CMHC & others)
Not exactly a “grant”, but Canada’s insured mortgage system is effectively a form of support that allows first-time buyers and families to purchase with as little as 5% down.
According to CMHC and federal guidance: CHECK IT OUT
- For homes priced $500,000 or less, minimum down payment is 5%.
- Between $500,000 and $1,499,999, you need 5% on the first $500,000 + 10% on the remainder.
- At $1.5 million or more, you generally need at least 20% down — insured mortgages are not available at those prices.
Mortgage loan insurance (often called CMHC insurance, though private insurers also exist) protects the lender, but it’s what makes these low down payments possible for many first-time buyers. MORTGAGE DEFAULT INSURANCE CALCULATOR
5. Stacking these programs: what it can look like for a family
Here’s how a typical Ontario family might combine programs:
Scenario: A couple buying their first home in Ontario.
They could potentially:
- Each contribute to an FHSA and deduct contributions:
- Up to $40,000 each ($80,000 total) over time, plus investment growth, used tax-free toward the purchase.
- Use the Home Buyers’ Plan:
- If they have RRSP savings, each could withdraw up to $60,000 tax-free (up to $120,000 combined) for their down payment, repaid over 15 years.
- Claim the First-Time Home Buyers’ Tax Credit:
- Up to $10,000 combined, for a $1,500 tax reduction.
- Use Ontario’s $4,000 LTT refund, and if buying in Toronto, add the MLTT rebate (up to about $4,475). Ratehub.ca+3Ontario+3Devry Smith Frank LLP+3
- If they buy a new home, they may also qualify for:
- The existing GST/HST new housing rebate.
- The new FTHB GST rebate and Ontario’s proposed 8% HST rebate, if and when fully implemented for their purchase dates.
All of this doesn’t magically make housing “cheap,” but it can easily add up to tens of thousands of dollars in combined tax savings, rebates, and flexible savings tools.
6. A quick note on programs that have ended (so you don’t get misled)
You might still see references online to the First-Time Home Buyer Incentive (the federal shared-equity program where the government took 5–10% equity in your home). This program has been discontinued:
- The CMHC confirms that no new applications have been accepted since March 21, 2024, and no new approvals are granted after March 31, 2024.
- Multiple financial and housing sites now describe it as cancelled due to low uptake.
So if you’re planning a purchase in 2025 or beyond, you shouldn’t rely on this particular program being available. READ ABOUT IT HERE and HERE
7. How first-time buyers and families in Ontario can move forward
If you’re a first-time buyer or a young family in Ontario, here’s a practical checklist:
- Confirm your “first-time buyer” status
Definitions differ slightly between FHSA, HBP, LTT refunds, and GST/HST rebates, so verify how each one defines “first-time.” - Open an FHSA as early as possible
Even if buying is a couple of years away, starting an FHSA now gives your money more time to grow tax-free. - Review your RRSPs with an advisor
If you have RRSP savings, plan how much you can safely withdraw under the HBP and what the 15-year repayment looks like in your budget. - Budget for closing costs after rebates
Use an Ontario land transfer tax calculator to estimate LTT before and after the first-time buyer rebates; if buying in Toronto, include MLTT and its rebate. - If you’re considering a new home
Talk to your lawyer or accountant about:- Existing GST/HST new housing rebate.
- New FTHB GST rebate.
- Ontario’s proposed 8% HST rebate.
These programs are powerful but time-sensitive and depend on purchase and occupancy dates.
- Get pre-approved and understand insured mortgage rules
With high prices, most first-time buyers use insured mortgages (5–10% down). Make sure you understand how CMHC or private mortgage insurance affects your monthly payments and allowable home price. READ THIS ARTICLE - Work with professionals who follow policy changes
Programs like the HST rebates and land transfer tax refunds evolve with each budget. A good real-estate agent, mortgage broker, accountant and lawyer can help you avoid missing money you’re entitled to.
Bottom line:
For first-time buyers and families in Ontario, the landscape isn’t easy — but between the FHSA, RRSP Home Buyers’ Plan, tax credits, land transfer tax rebates, and new GST/HST relief on new homes, there are meaningful ways to reduce both your up-front cash needed and your overall tax bill.
The key is to plan early, stack the programs you qualify for, and double-check the latest rules before you buy.
