Buying your first home may be more achievable than you think, especially when you understand the financial programs available to help.

Between saving for a down payment, qualifying for a mortgage and covering closing costs, purchasing a first home can feel overwhelming.

The good news is that several federal and Ontario programs are available to help qualified first-time buyers save money, reduce certain taxes and potentially purchase a home sooner.

Here are eight opportunities first-time home buyers in Ontario should know about.

Programs at a Glance
 

Many buyers qualify for more than one of these programs, allowing them to combine several incentives and potentially save thousands of dollars on their first home purchase.

1. First Home Savings Account (FHSA)

The First Home Savings Account, or FHSA, has become one of the most useful savings tools available to first-time buyers.

It combines some of the main benefits of an RRSP and a TFSA:

• Qualifying contributions are generally tax deductible.
• Investments can grow tax-free inside the account.
• Qualifying withdrawals to purchase a first home are not taxable.
• First-year participation room is $8,000.
• The lifetime contribution limit is $40,000 per person.

A couple purchasing together could potentially contribute a combined total of up to $80,000, provided both buyers qualify.

How buyers can take advantage of it

Consider opening an FHSA before you are ready to buy, even if your initial contribution is small. Your FHSA participation room does not begin until you open your first account.

You may also be able to carry forward up to $8,000 of unused participation room to a future year, subject to the program’s rules.

The current annual participation room and lifetime contribution limit are confirmed by the Canada Revenue Agency.

2. RRSP Home Buyers’ Plan (HBP)

The Home Buyers’ Plan allows eligible first-time buyers to withdraw money from their RRSP to buy or build a qualifying home.

The current withdrawal limit is:

• Up to $60,000 per eligible buyer
• Up to $120,000 for an eligible couple

The amount withdrawn is not immediately taxable, but it must generally be repaid to the buyer’s RRSP over a period of up to 15 years.

How buyers can take advantage of it

This program may be particularly helpful for someone who has built up substantial RRSP savings but does not have enough accessible cash for a down payment.

Eligible buyers may also use the Home Buyers’ Plan and an FHSA withdrawal toward the same home, provided they meet the requirements of both programs.

Before withdrawing money, consider the effect on your retirement savings and make sure you understand the repayment requirements.

3. First-Time Home Buyers’ Tax Credit

When you purchase your first home, you may qualify for the federal First-Time Home Buyers’ Tax Credit, officially known as the Home Buyers’ Amount.

Eligible buyers can claim an amount of up to $10,000 on their federal income tax return. Because this is a non-refundable tax credit, it can reduce the federal income tax payable by up to approximately $1,500.

It is important to understand the difference:

• You do not receive a $10,000 payment.
• You claim an amount of up to $10,000 on your tax return.
• The resulting federal tax reduction can be worth up to $1,500.
• Because the credit is non-refundable, it cannot create a benefit beyond the federal tax you would otherwise owe.

Although the credit is not received on closing day, it can help offset some of the expenses associated with buying your first home, including:

• Legal fees
• Home inspection costs
• Title insurance
• Moving expenses
• Other closing-related costs

You do not have to match the tax credit to a specific receipt or expense.

How do buyers claim it?

The Home Buyers’ Amount is claimed when you file the income tax return for the year in which you purchased the home.

For example, someone purchasing a qualifying home during 2026 would normally claim the applicable amount when filing their 2026 income tax return in 2027.

The amount is entered on line 31270 of the federal tax return.

If more than one eligible buyer purchases the home, they may divide the amount between their tax returns. However, the total claimed for the same home cannot exceed the maximum allowed.

Good to know: This credit is not automatically applied at closing. Remember to mention your home purchase to your accountant or tax preparer and keep your purchase documents in case the CRA asks to review them.

4. Ontario Land Transfer Tax Refund

Land Transfer Tax can be one of the largest closing costs for Ontario home buyers.

Eligible first-time buyers may receive a refund of all or part of the Ontario Land Transfer Tax, up to a maximum of $4,000.

A qualifying buyer would pay no Ontario Land Transfer Tax on the first $368,000 of the home’s value. For a home priced above $368,000, the buyer may still receive the maximum $4,000 refund but must pay any remaining tax.

A simple example

Suppose the Ontario Land Transfer Tax on a Durham Region home is $7,475.

• Ontario Land Transfer Tax: $7,475
• First-time buyer refund: $4,000
• Remaining amount payable: $3,475

This is why first-time buyers should not assume the refund eliminates Land Transfer Tax entirely. On many Durham Region purchases, it reduces the tax but does not cover the full amount.

Who may qualify?

Generally, the buyer must:

• Be at least 18 years old.
• Have never owned a home or an interest in a home anywhere in the world.
• Occupy the property as their principal residence within nine months.
• Be a Canadian citizen or permanent resident, subject to certain rules for buyers who obtain that status after closing.
• Meet the requirements concerning a spouse’s previous homeownership.

Ontario’s definition of a first-time buyer is stricter than the definition used for some federal programs. Previous ownership may disqualify a buyer regardless of how long ago the home was owned or whether it was purchased, inherited or received as a gift.

How is the refund claimed?

The buyer’s real estate lawyer will usually calculate the Land Transfer Tax and claim the refund through Ontario’s electronic land registration system.

When the refund is claimed at registration, it immediately reduces the Land Transfer Tax payable on closing.

If the refund is not claimed at registration:

• The buyer may have to pay the full Land Transfer Tax.
• The buyer may then apply to the Ontario Ministry of Finance.
• The application must generally be submitted within 18 months of registration.

Something to remember: If a first-time buyer purchases with someone who does not qualify, such as a parent who already owns a home, the available refund may be affected by each person’s ownership interest. Discuss how title will be registered with your lawyer and mortgage professional before closing.

5. First-Time Home Buyers’ GST/HST Rebate on New Homes

Eligible first-time buyers purchasing or building a qualifying new home may be able to recover a significant portion of the GST or federal part of the HST.

Under the federal first-time home buyer rebate:

• Qualifying new homes valued at up to $1 million may receive a rebate of up to 100% of the GST or federal portion of the HST.
• The maximum federal rebate is $50,000.
• The rebate is gradually reduced for qualifying homes valued between $1 million and $1.5 million.
• Homes valued at $1.5 million or more do not qualify for the federal first-time buyer rebate.

Ontario has also introduced an enhanced rebate that may allow eligible purchasers to recover up to $80,000 of the provincial portion of the HST. Specific agreement dates and other conditions apply.

Buyers of new construction should have their lawyer confirm:

• Whether the advertised purchase price includes the applicable rebates
• Whether the rebate will be assigned to the builder
• Whether the buyer must apply directly
• Which agreement, construction and occupancy dates apply

6. Understanding Minimum Down Payment Requirements

Many first-time buyers believe they must save a 20% down payment before they can purchase a home.

That is not always the case.

For an owner-occupied home that qualifies for mortgage insurance, the minimum down payment is generally:

• 5% for a home priced at $500,000 or less
• 5% of the first $500,000 and 10% of the remaining portion for a home priced between $500,000 and $1,499,999
• 20% for a home priced at $1.5 million or more

Mortgage loan insurance is generally required when the down payment is less than 20%, and insured financing is not available for homes priced at $1.5 million or more.

A smaller down payment may allow a qualified buyer to purchase sooner, but it also results in a larger mortgage and a mortgage insurance premium.

Before deciding how much to put down, consider the complete monthly cost of ownership, including:

• Mortgage payments
• Property taxes
• Utilities
• Home insurance
• Condo fees, where applicable
• Maintenance and repairs

7. Gifted Down Payments

Not every first-time buyer has enough personal savings to cover the entire down payment.

Many lenders and mortgage insurers permit a buyer to use a genuine, non-repayable financial gift from a relative as part or all of the down payment.

The lender will usually request:

• A signed gift letter
• Confirmation of the relationship between the donor and buyer
• Proof that the funds have been transferred
• Evidence showing the source of the money
• Confirmation that the gift does not have to be repaid

A gifted down payment is different from a loan. If the money must be repaid, that obligation must be disclosed because it could affect the buyer’s mortgage qualification.

Speak with your mortgage professional before the money is transferred. This will help ensure the funds are deposited at the correct time and that all required documentation is available.

8. Local Affordable Homeownership Programs

Municipalities and housing organizations sometimes offer programs designed to help qualifying households purchase a home.

Depending on the location and available funding, assistance may include:

• Down payment assistance
• Forgivable or repayable loans
• Shared-equity arrangements
• Affordable ownership opportunities
• Programs tied to household income or maximum purchase prices

These programs may have limited application periods and can change as funding becomes available.

Before relying on local assistance as part of your purchasing plan, confirm:

• Whether applications are currently being accepted
• Household income limits
• Maximum home prices
• Minimum down payment requirements
• Repayment or resale conditions
• Whether the program can be combined with other incentives

Can These Programs Be Combined?

In many cases, yes.

An eligible buyer could potentially use:

• Savings and a qualifying FHSA withdrawal
• An RRSP withdrawal through the Home Buyers’ Plan
• The Ontario Land Transfer Tax Refund
• The federal Home Buyers’ Amount
• An applicable new-home GST/HST rebate
• A properly documented gifted down payment

However, each program has its own eligibility requirements and its own definition of a first-time buyer.

Qualifying for one program does not automatically mean you will qualify for all of them.

From My Experience

Many buyers wait until they have found a property before asking about first-time buyer programs.

By that point, they may have missed opportunities to open an FHSA, organize an RRSP withdrawal, properly document a gifted down payment or accurately prepare for closing costs.

The better approach is to start planning before beginning your home search.

Understanding your down payment, mortgage qualification, available programs and estimated closing expenses can help you establish a comfortable price range and make more confident decisions when the right property becomes available.

Thinking About Buying Your First Home?

Whether you are ready to buy soon or are still planning for the future, I would be happy to help you understand the home-buying process and connect you with the appropriate professionals. You can call me at 905-683-7800.

Or complete the Contact Form and let us know in the Comments section if you would like more information about:

• First-time home buyer programs
• Preparing for mortgage pre-approval
• Down payment options
• Closing costs
• Homes currently available in Durham Region
• My VIP Buyer Program
• My Buyer Guarantees

There is absolutely no obligation. The goal is to help you understand your options and develop a plan that fits your situation.

Government programs, mortgage rules and tax requirements may change. Buyers should obtain independent legal, mortgage, accounting and financial advice regarding their eligibility and personal circumstances.

 

Thanks For Reading Today’s BLOG!

Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com


If you or anyone you know is considering making a move in the next little while, give me a call or pass on my number ... 905-683-7800 (Office) or 905-426-7484 (Direct).

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