First-Time Home Buyer Programs in Canada (2026): FHSA, HBP, and More

Programs Available to First-Time Home Buyers in Canada

First-time home buyers in Canada have access to several programs that reduce the upfront cost of buying a home. As of 2026, the most valuable are:

1. First Home Savings Account (FHSA) — a tax-sheltered savings account that lets you save up to $40,000 tax-free specifically for a home purchase 2. RRSP Home Buyers' Plan (HBP) — withdraw up to $35,000 from your RRSP tax-free for a first home purchase 3. Provincial land transfer tax rebates — most provinces with land transfer tax offer first-time buyer rebates 4. GST/HST New Housing Rebate — partial rebate on the tax paid on a new-construction home

Note: The First-Time Home Buyer Incentive (FTHBI), a shared equity program run by CMHC, was wound down in March 2024 and is no longer available.

First Home Savings Account (FHSA): The Best First-Time Buyer Tool

The FHSA, introduced in April 2023, is the most powerful first-time home buyer tool in Canada. It combines the tax advantages of an RRSP and a TFSA specifically for home savings.

How the FHSA works: • Annual contribution limit: $8,000/year • Lifetime contribution limit: $40,000 per person • Contributions are tax-deductible (like an RRSP) — reduces your taxable income • Growth is tax-sheltered (like a TFSA) — investments compound without tax • Withdrawals for a qualifying home purchase are completely tax-free • Unused annual room carries forward one year (so you can contribute $16,000 in year two if you missed year one)

Who qualifies: • Canadian resident, age 18+ • First-time home buyer (have not owned a qualifying home in the current year or the preceding 4 calendar years) • FHSA must be held for at least one calendar year before making a qualifying withdrawal

Combining FHSA and HBP: You can use both your FHSA and your RRSP Home Buyers' Plan on the same purchase. A couple could combine: • $40,000 FHSA (person 1) + $40,000 FHSA (person 2) = $80,000 tax-free • $35,000 HBP (person 1) + $35,000 HBP (person 2) = $70,000 tax-free • Combined: up to $150,000 in tax-advantaged savings toward one home purchase

If you do not buy a home, you can transfer your FHSA balance to an RRSP without affecting your RRSP contribution room — so there is no downside to opening one even if your plans change.

RRSP Home Buyers' Plan (HBP): $35,000 Withdrawal

The Home Buyers' Plan lets first-time home buyers withdraw up to $35,000 from their RRSP tax-free to use as a down payment. Couples can each withdraw $35,000 for a combined $70,000.

Key rules: • You must be a first-time home buyer (same definition as FHSA: no principal residence in the current year or past 4 years) • The RRSP funds must have been on deposit for at least 90 days before withdrawal • You must have a signed purchase agreement for a qualifying home • The home must be occupied as your principal residence within one year of purchase • Repayment: you must repay the withdrawn amount back into your RRSP over 15 years (starting the second year after withdrawal). If you miss a year's repayment, that year's amount is added to your taxable income.

FHSA vs HBP: For new home savers, the FHSA is generally better because it does not require repayment and the withdrawal is unconditionally tax-free. The HBP is useful if you already have RRSP savings you want to redirect to a home purchase.

Down Payment Rules for First-Time Buyers in Canada (2026)

The minimum down payment in Canada depends on the purchase price. As of December 2024, the rules are:

• Properties under $500,000: minimum 5% down • Properties $500,000 to $999,999: 5% on the first $500,000 + 10% on the portion above $500,000 • Properties $1,000,000 to $1,499,999: 10% on the entire purchase price (new rule as of December 2024 — previously 20% was required at $1M+) • Properties $1,500,000 and above: 20% minimum down payment required

Note: Properties over $999,999 (under the new threshold) now require CMHC insurance if you put down less than 20%. The $1.5M CMHC cap is the new upper limit for insured mortgages.

Land Transfer Tax Rebates by Province

Most provinces and some cities charge land transfer tax (LTT) when you buy a property. Most offer first-time buyer rebates:

Ontario: • Provincial LTT rebate: up to $4,000 (covers the full LTT on homes under ~$368,000; partial rebate above) • Toronto Municipal LTT rebate (for Toronto properties): additional up to $4,475 • Combined maximum rebate in Toronto: up to $8,475

British Columbia: • Property Transfer Tax (PTT) rebate: full exemption on the first $500,000 for homes up to $835,000 (buyer must be Canadian citizen or PR)

Prince Edward Island: • Full LTT exemption for first-time buyers on homes up to $200,000

No land transfer tax provinces: • Alberta, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland, and Quebec do not have a provincial land transfer tax (though some cities charge a local transfer tax) • Note: Quebec has a "Welcome Tax" (taxe de bienvenue) — no rebate is available for most buyers

GST/HST New Housing Rebate

If you are buying a brand-new home or substantially renovated home, you paid GST or HST on the purchase price. The government offers a partial rebate.

Federal GST rebate: • For homes priced under $450,000: partial rebate up to $6,300 • For homes $450,000 and above: no federal rebate

Provincial component: • Ontario and several other provinces have an additional provincial HST rebate • For newly built homes in Ontario up to $400,000, the combined rebate can be $24,000 or more

The builder often includes the rebate in the purchase price (assigns it to themselves). Confirm in your purchase agreement whether the price is before or after the rebate is applied.

CMHC First-Time Home Buyer Programs

CMHC no longer operates the First-Time Home Buyer Incentive (wound down March 2024). However, first-time buyers still benefit indirectly from CMHC insurance:

• CMHC-insured mortgages (less than 20% down) are available at A-lender rates because the government guarantee reduces lender risk • First-time buyers can access 30-year amortizations on insured mortgages for new-build homes (previously insured was capped at 25 years) • The maximum insurable purchase price is $1,500,000 — raised from $1,000,000 in December 2024

CMHC insurance premiums for first-time buyers are the same as for any buyer: 2.80% to 4.00% of the insured mortgage amount depending on LTV.

First-Time Buyer Checklist: Steps Before You Apply

Before applying for a mortgage as a first-time buyer in Canada:

1. Open an FHSA immediately — even if buying is 1-2 years away. Contribute $8,000 for the tax deduction and start building savings.

2. Check your RRSP for HBP availability — funds must be on deposit 90 days before withdrawal.

3. Save your down payment documentation — 90 days of bank statements showing where the funds came from are required by lenders.

4. Get your credit report — pull free reports from Equifax Canada and TransUnion Canada. Dispute any errors 3-6 months before applying.

5. Calculate your maximum — use the CMHC rules above to understand what you can put down and what mortgage you will need.

6. Get pre-approved — approach a mortgage broker 90-120 days before you plan to make an offer. Get a rate hold while you shop.

7. Factor in closing costs — in addition to down payment, budget 1.5-4% of the purchase price for closing costs: land transfer tax (after any rebate), legal fees ($1,500-$2,500), title insurance ($150-$350), home inspection ($300-$600), and adjustments.