Real Estate
First Time Home Buyer Incentives in Canada 2026
Updated February 2026 · 8 min read
💡 Quick Summary
Canada has several programs to help first-time buyers. The biggest ones are the FHSA (up to $40,000 tax-free), the Home Buyers' Plan ($60,000 RRSP withdrawal), and provincial land transfer tax rebates. Stack them all for maximum savings.
Buying your first home in Canada is harder than it has ever been. But the government has created several programs specifically to help first-time buyers save for and afford a down payment. If you qualify, these programs can save you tens of thousands of dollars.
Here is every program available in 2026, how they work, and how to stack them together.
1. First Home Savings Account (FHSA) — The Big One
The FHSA is the most powerful tool for first-time buyers. Introduced in 2023, it combines the best features of the TFSA and RRSP.
Annual contribution limit
$8,000
Lifetime contribution limit
$40,000
Tax deduction on contributions
Yes (like RRSP)
Withdrawals for home purchase
Tax-free (like TFSA)
Unused room carries forward
Yes (up to $8,000/yr)
Account must be open before
Age 71
Example savings:
If you contribute $8,000/year for 5 years ($40,000 total) and you are in the 33% tax bracket, you save approximately $13,200 in taxes — plus the money grows tax-free inside the account.
2. Home Buyers' Plan (HBP)
The HBP lets you withdraw from your RRSP to buy or build a qualifying home — without paying tax on the withdrawal, as long as you repay it over 15 years.
Maximum withdrawal
$60,000 per person
For couples
$120,000 combined
Repayment period
15 years
When repayment starts
2 years after withdrawal
Tax on withdrawal
None if repaid
RRSP must be in account
90 days before withdrawal
⚠️ If you don't repay the annual amount, it gets added to your taxable income that year. Make sure you can commit to the repayment schedule.
3. First-Time Home Buyers' Tax Credit
A federal non-refundable tax credit for first-time buyers who purchase a qualifying home.
$10,000
Credit amount
$1,500
Max tax reduction
15%
Federal rate applied
Claim it on line 31270 of your tax return in the year you buy. Both spouses can split the claim as long as the combined total doesn't exceed $10,000.
4. GST/HST New Housing Rebate
If you buy a newly built home or substantially renovate an existing one, you may qualify for a partial rebate of the GST/HST paid.
The rebate applies to homes under $450,000 (full rebate) and phases out between $450,000–$500,000. For new builds over $500,000, no federal rebate applies — but some provinces have their own rebates.
5. Provincial Land Transfer Tax Rebates
| Province | Max Rebate | Notes |
|---|---|---|
| Ontario | Up to $4,000 | On provincial LTT; Toronto buyers get an additional municipal rebate up to $4,475 |
| British Columbia | Up to $8,000 | Newly built homes under $835,000; partial rebate up to $1,035,000 |
| Prince Edward Island | Full LTT rebate | For homes under $200,000 for first-time buyers |
| Alberta, Saskatchewan, Nova Scotia | N/A | No provincial land transfer tax |
| Quebec | Varies by municipality | Some cities offer rebates — check your local municipality |
Stacking All Programs: A Real Example
Scenario: Sarah, 28, buying a $600,000 home in Toronto, 33% tax bracket
FHSA contributions (5 years × $8,000)
~$13,200 in tax savings
FHSA growth (invested, 5 years)
~$4,000–6,000 in tax-free growth
Home Buyers' Plan (RRSP withdrawal)
Up to $60,000 toward down payment
First-Time Home Buyers' Tax Credit
$1,500 off federal taxes
Ontario + Toronto LTT Rebate
Up to $8,475 in land transfer tax rebates
Total potential benefit
$87,000+
Key Takeaway
If you are planning to buy a home in the next 1–5 years, open an FHSA today — even if you can only contribute $500. The contribution room accumulates from the day you open the account, and the tax savings are significant. Do not wait.