First time home buyer incentives in Ontario: A comprehensive guide

Summary: First-time buyers in Ontario have three main programs: the Land Transfer Tax Rebate (up to $4,000 off provincial LTT), the Home Buyers' Plan (withdraw up to $60,000 from your RRSP tax-free), and the First Home Savings Account (save up to $40,000, with tax-deductible contributions and tax-free withdrawals). Toronto buyers also get a municipal land transfer tax rebate. The federal First-Time Home Buyer Incentive was discontinued in 2024.

Who counts as a first-time home buyer in Ontario?

It's broader than never having owned a home, but the test depends on the program. For the Home Buyers' Plan and the FHSA, you generally qualify if you did not live in a home you owned (or that your spouse owned) in the current year or the previous four calendar years. For Ontario's land transfer tax rebate the test is stricter: you must never have owned an eligible home, or an interest in one, anywhere in the world, and your spouse cannot have owned one while you were together. Because the rules differ, it's worth confirming your eligibility with a real estate lawyer early in your planning.

What incentives can first-time buyers in Ontario use?

Three programs do most of the work, and two of them reward planning ahead:

• Land Transfer Tax Rebate - up to $4,000 off the provincial land transfer tax.

• Home Buyers' Plan (HBP) - withdraw up to $60,000 from your RRSP, tax-free, toward your purchase.

• First Home Savings Account (FHSA) - save up to $40,000 in a dedicated account with tax-deductible contributions and tax-free withdrawals.

Each is covered below. The FHSA and HBP only help if you've been contributing, so the earlier you understand them the better.

How much is the Ontario Land Transfer Tax Rebate?

Ontario's first-time buyer Land Transfer Tax Rebate refunds part of the provincial land transfer tax, up to a maximum of $4,000. That fully covers the tax on a home priced around $368,000 or less; above that, it reduces the tax you owe. The savings can be redirected to furnishing, renovations, or settling in. For the full details, see our guide to the first-time home buyer Land Transfer Tax rebate, or estimate your amount with the Ontario land transfer tax calculator.

How does the Home Buyers' Plan (HBP) work?

The Home Buyers' Plan lets you withdraw up to $60,000 from your RRSP (up from $35,000 as of April 2024) to buy or build a qualifying home, which can include a house, condo, mobile home, or a share in a co-operative housing corporation. A couple who both qualify can withdraw up to $60,000 each, for $120,000 combined. The withdrawal is tax-free as long as you repay it to your RRSP over 15 years; repayment generally starts the second year after you withdraw, giving you time to settle in first.

How does the First Home Savings Account (FHSA) work?

Launched in 2023, the FHSA combines the best features of an RRSP and a TFSA for first-home savers. You can contribute up to $8,000 per year, to a lifetime maximum of $40,000, and hold investments like GICs, mutual funds, or stocks inside it. It has three benefits: contributions are tax-deductible (like an RRSP), growth is tax-free, and qualifying withdrawals to buy your first home are tax-free (like a TFSA). You can use the FHSA and the HBP together for the same purchase. Learn more in our guide to the FHSA.

Are there municipal incentives in Toronto?

Yes. If you're buying in the City of Toronto, you'll pay a municipal land transfer tax on top of the provincial one, but first-time buyers can claim a municipal rebate of up to $4,475 in addition to the provincial $4,000. Use our Toronto land transfer tax calculator to see what you'd pay and what rebate you qualify for.

What about the First-Time Home Buyer Incentive?

The federal First-Time Home Buyer Incentive (FTHBI), a shared-equity program launched in 2019 that lent 5% to 10% of the purchase price toward a down payment, was discontinued. CMHC stopped accepting new applications on March 21, 2024, and granted no new approvals after March 31, 2024 (existing participants are unaffected). The government pointed to the FHSA as the better tool for first-time buyers going forward, so if you read about the FTHBI on older sites, know it is no longer available.

How do you actually claim these incentives?

There's no single application for everything. The land transfer tax rebate is claimed at closing, and your real estate lawyer handles it. The HBP and FHSA only pay off if you've been contributing, so the most important step is to start early: open and contribute to an FHSA, and build up your RRSP so the HBP has funds to draw on. When you're closer to buying, line up a real estate agent and a real estate lawyer to guide the purchase and make sure you capture every rebate you're entitled to.

Frequently asked questions

Who qualifies as a first-time home buyer in Ontario?

It depends on the program. The HBP and FHSA generally require that you haven't owned a home you lived in during the current year or the previous four years. The land transfer tax rebate is stricter: you must never have owned an eligible home anywhere.

How much can a first-time buyer save on land transfer tax in Ontario?

Up to $4,000 on the provincial tax, which fully covers a home priced around $368,000 or less. Toronto buyers can claim an additional municipal rebate of up to $4,475.

How much can I withdraw under the Home Buyers' Plan?

Up to $60,000 from your RRSP, tax-free, as of April 2024. A qualifying couple can withdraw $60,000 each. You repay it to your RRSP over 15 years.

How much can I put in an FHSA?

Up to $8,000 per year, to a lifetime maximum of $40,000. Contributions are tax-deductible and qualifying withdrawals for your first home are tax-free.

Is the First-Time Home Buyer Incentive still available?

No. CMHC discontinued it in 2024 and grants no new approvals. The First Home Savings Account is the federal government's replacement tool.

About the author

Joel Fox is a co-founder and COO of Ownright. He writes about the programs and costs first-time buyers in Ontario need to understand before they buy.

At Ownright, we focus entirely on Ontario residential real estate law, and our lawyers can help you confirm which first-time buyer incentives you qualify for and capture them at closing. You can start your closing online or get in touch with any questions. For related reading, see our guides on the first-time home buyer Land Transfer Tax rebate, the First Home Savings Account, and the costs involved in a real estate transaction.

Important note: This article is not legal or financial advice. No one should act, or refrain from acting, based solely on the information in this post without first seeking appropriate professional advice.