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2025 Canada First-Time Home Buyer's Guide - Programs & Incentives

Being a first-time home buyer in Canada can be both exciting… and expensive! After all, most people don’t have proceeds from the sale of a property to fund their first purchase. Fortunately, there are several government programs that can help with the cost, such as the RRSP Home Buyers’ Plan, the new First Home Savings Account (FHSA), tax credits, rebates, and provincial programs.  To help you compare your options easily, here’s a breakdown of each program’s benefits, eligibility rules, and key takeaways.

Program

Key benefit

Max value

Other details

First Home Savings Account (FHSA)

Combines tax-free growth with tax-deductible contributions

$40,000 lifetime value per person ($80,000 per couple)

No repayment required; funds can transfer to RRSP/RRIF if unused

RRSP Home Buyers' Plan (HBP)

Tax-free RRSP withdrawal for home purchase

$60,000 per individual

Must repay over 15 years; grace period for withdrawals made by the end of 2025

Land Transfer Tax Rebate

Rebate on provincial and/or municipal land transfer tax

ON: $4,000
BC: $8,000
PEI: $2,000
Toronto: $4,475

Only available in select provinces/cities; eligibility rules apply

First-Time Home Buyers’ Tax Credit (HBTC)

Reduces tax payable on legal/closing costs

$1,500 (15% of $10,000)

Non-refundable; credit can be split between partners, but max remains $10,000

Montréal Home Purchase Assistance

Lump-sum payment to help with purchase or welcome tax refund

Up to $15,000 (new homes) and up to $7,000 (existing homes)

Value depends on family status, price of home, location, and energy certification

GST Exemption on New Builds (2025 proposal)

Removes 5% GST on new or substantially renovated homes

Up to $50,000 in savings (on $1M home)

Still a proposal; pending legislation

First-time home buyer programs in Canada

Here are all the programs that the government offers to lower your upfront costs and make homeownership more attainable.

First Home Savings Account

The First Home Savings Account, introduced on April 1, 2023, is a tax-free savings vehicle that combines features from both TFSAs (Tax Free Savings Accounts) and RRSPs (Registered Retirement Savings Plans). Your contributions are tax-deductible, and withdrawals used for a qualifying home purchase are also tax-free. Unlike the RRSP Home Buyers’ Plan, you don’t have to repay the funds you withdraw from the account. 

To open a First Time Savings Account, you'll need to confirm your eligibility and provide government-issued ID and your SIN to get started. Here are the contribution limits:

  • You can contribute up to $8,000 per year, with unused room carried forward
  • The lifetime limit is $40,000
  • Couples can each open an FHSA, doubling total savings to $80,000

To open a first-time home buyer savings account, you'll need to confirm your eligibility and provide government-issued ID and your SIN to get started. When you’re ready to withdraw funds, you must have a signed agreement to purchase a qualifying home. If you don’t end up buying, your savings can be transferred to your RRSP or RRIF without tax penalties. The account can remain open for up to 15 years, or until the end of the year you buy your first home (whichever comes first).

RRSP Home Buyers' Plan

The RRSP Home Buyers’ Plan (HBP) lets first-time home buyers withdraw up to $60,000 to use toward a down payment from their RRSP, without paying taxes on the withdrawal. Normally, taking money out of your RRSP before retirement would be taxed as income, but the HBP offers an exception for qualifying home purchases. To qualify for the first-time home buyers' plan:

  • You must not have owned a home (or lived in a spouse or partner’s home) within the last four years. 
  • You must plan to live in the new home as your primary residence
  • The RRSP funds must have been in your account for at least 90 days before the purchase.

Repayments under the HBP are spread over 15 years. Normally, you’ll start repaying in the second year after your withdrawal — but if you made the first withdrawal between January 1, 2022, and December 31, 2025, you get a three-year grace period and start repaying in year five. If you miss a required annual repayment, that amount will be taxed as income for that year.

While the Home Buyers' Plan in Canada helps reduce upfront costs, using your RRSP now can impact your long-term retirement savings. Weigh the trade-offs before deciding.

Land Transfer Tax rebate

Some Canadian provinces charge a land transfer tax when you buy a house. This is generally between 0.5% and 2.0% of the purchase price of the property, and represents the largest closing cost you'll have to pay. In an effort to help first-time home buyers, certain provinces, like British Columbia, Ontario, and Prince Edward Island, offer a rebate on some or all of this tax if you're eligible. Home buyers in the City of Toronto are also eligible to receive a rebate on the city’s land transfer tax, in addition to the provincial rebate.

Here are the maximum rebates for the three provinces (and Toronto):

First Time Home Buyers' Tax Credit

The First-Time Home Buyers' Tax Credit helps offset some of the upfront costs of purchasing a home, such as legal fees, home inspections, and closing costs. Eligible buyers can claim up to $10,000 on their tax return for a qualifying home. Since it’s a non-refundable credit, the amount is multiplied by the lowest federal tax rate (15%), reducing your income tax payable by up to $1,500. However, if your tax owing is already $0, you won’t get the credit as a refund.

To get your First Time Home Buyer Tax Credit, you can simply claim it on Line 31270 of your tax return. If you're buying the home with another eligible person (such as a spouse or family member), you can split the credit, but the combined total can’t exceed $10,000.

Home Purchase Assistance Program in Montréal

If you're buying your first home in Montréal, you might want to check the city’s Home Purchase Assistance Program. First-time buyers of new homes can get a lump-sum payment of up to $15,000, depending on the home’s location, size, and household type. Financial support for new homes-

  • Single buyers (no children): Assistance of $5,000 for homes up to $305,000.
  • Multiple buyers (no children): Same $5,000 assistance, but for homes up to $380,000.
  • Families with at least one child under 18: Up to $15,000 for homes up to $610,000 and $10,000 for porches up to $540,000.
  • Location premiums: If your new home meets environmental certification, you can receive $2,500 more and if it’s located downtown, assistance can increase by $5,000.

Families with at least one child under 18 who purchase an existing home may qualify for a welcome tax (real estate transfer tax) refund of $5,000 to $7,000 for properties priced up to $725,000.

GST exemption on newly constructed homes

In March 2025, the newly-minted Prime Minister Mark Carney introduced a campaign promise to eliminate the 5% Goods and Services Tax (GST) for first-time home buyers purchasing newly constructed or “substantially renovated” properties priced at $1 million or under. Removing GST means buyers could save up to $50,000 on a $1-million home, potentially making ownership more affordable and encouraging builders to increase the housing supply. 

Let's see how the recent changes affect first-time homebuyers.

WATCH: 2025 mortgage rule changes for first-time home buyers

Support for newcomers buying their first home in Canada

While many federal and provincial newcomer programs are available in Canada, it’s equally important to understand the practical aspects of navigating the system as a new resident.  

1. Get familiar with Canadian mortgage requirements

To qualify for a mortgage as a newcomer, most lenders will require proof of income, employment history, and your immigration status, such as a permanent resident card or work permit. Down payment grant for first-time buyers is the same as for all buyers: 5% for homes under $500,000, 10% for the portion of the price between $500,000 and $1.5 million, and 20% for homes priced above $1.5 million. However, if you’re putting down less than 20%, you’ll need mortgage default insurance. As of December 15, 2024, first-time home buyers borrowers also have the option to extend their amortization to 30 years.

WATCH: How a 30-year amortization impacts your mortgage payments

2. Build or transfer your credit history

A strong Canadian credit history helps you qualify for better mortgage rates, but newcomers often start with no domestic credit record. Consider opening a secured credit card and make timely payments for everyday expenses to establish your creditworthiness. Some lenders may also accept international credit reports or financial references from your home country — ask your lender if they support this.

3. Plan for additional costs beyond the down payment

In addition to your down payment, budget for closing costs like legal fees, home inspections, title insurance, and property taxes. These can add up to 1.5%-4% of your home’s price. If you're using international savings, factor in currency conversion rates and transfer fees. You may also need to pay land transfer tax, though rebates are available for first-time buyers in provinces like Ontario, British Columbia, and Prince Edward Island.

Also read- Should you always save a 20% down payment when you buy a home?

4. Prepare for newcomer-specific tax implications

As a newcomer, you may encounter unique tax considerations when buying your first home. For example, non-residents in Ontario and British Columbia may be subject to the Non-Resident Speculation Tax (NRST). If you plan to live in your new home, ensure it’s designated as your principal residence to qualify for tax exemptions on future capital gains.

5. Take advantage of newcomer mortgage programs

Canada’s major mortgage insurers — Canada Mortgage and Housing Corporation (CMHC), Sagen, and Canada Guaranty — offer specialized programs to help newcomers access financing for their first home. These programs are designed for individuals who might not meet traditional requirements, such as an established Canadian credit history. You can also consult a mortgage broker to find the best-suited program for your situation.

New to Canada? Check out Ratehub.ca’s financial resources for newcomers

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What first-time homebuyers should know about the U.S. tariffs 

First-time homebuyers should know that in early 2025, the United States imposed a 25% tariff on non-CUSMA-compliant Canadian goods, a 10% tariff on energy, 50% tariff on steel and aluminum, and a 25% global tariff on vehicles and auto parts. This prompted Canada to retaliate with its own 25% tariff on $ 30 billion worth of U.S. imports, as well as US-made vehicles. This uncertainty surrounding tariffs affects the mortgage market in two main ways:

  • Following the announcements in early April, bond yields briefly dipped to the 2.5–2.6% range, but have since rebounded to the 3.07% range as of July 2025, which is keeping fixed mortgage rates elevated. While this may limit affordability gains, current rates are still well below the highs of the past two years.
  • Before U.S. tariff tensions, the Bank of Canada (BoC) was on track to bring the overnight lending rate down to between 2 - 2.5%. However, it held the rate steady in both April and June, citing concerns about inflation driven by trade costs. A deeper economic slowdown could lead to cuts later in the year, but the outlook remains unclear.

Tariffs can also lead to a potential rise in unemployment or weaker wage growth, limiting how much first-time buyers can qualify for — or feel comfortable taking on. 

What are my options for provincial first-time home buyer programs?

Most first-time home buyer programs are found at the federal level, but there are several provinces that have their own programs as well (along with the land transfer tax rebates we mentioned earlier). Quebec, for example, offers an additional tax credit (max $750) to first-time homebuyers. 

To properly understand what you'll be eligible for in your province, it's worth speaking to a mortgage broker near you - consultations are free. Below are all of our provincial first-time home buyer pages, where you can find detailed, province-specific information. 

Province

Key benefit

First-Time Home Buyer Alberta 

Offers land transfer tax exemption via general property tax rebates (as no LTT exists).

First-Time Home Buyer British Columbia

First Time Home Buyers’ Program provides full/partial exemption from property transfer tax.

First-Time Home Buyer Manitoba

Land Transfer Tax Rebate of up to $1,500 for qualifying first-time home buyers.

First-Time Home Buyer New Brunswick

No land transfer tax rebate; some municipal-level support available.

First-Time Home Buyer Newfoundland and Labrador

A grant for 50% of legal closing costs, plus a repayable loan equal to up to 5% of the purchase price.

First-Time Home Buyer Nova Scotia

Down payment assistance program offering a repayable loan up to 5% of purchase price.

First-Time Home Buyer Ontario

Land Transfer Tax Refund of up to $4,000 for eligible first-time home buyers.

First-Time Home Buyer Prince Edward Island

A full rebate of the land transfer tax, if the property’s purchase price (or assessed value) is $200,000 or less.

First-Time Home Buyer Quebec

Offers a non-refundable tax credit up to $750 for first-time buyers.

First-Time Home Buyer Saskatchewan

A non‑refundable tax credit equal to 10.5% of up to $15,000, for a maximum benefit of $1,575.

First-time home buyer education topics

First-time home buyers: Frequently asked questions

How do I qualify as a first-time home buyer in Canada?


How much do first time home buyers have to put down in Canada?


What was the Canadian government's First-time home buyers’ incentive (FTHBI)?


What is the maximum RRSP contribution amount for a first-time home buyer?


How much money can I put in my FHSA?


What bank offers the FHSA in Canada?


How much does mortgage insurance cost for first-time buyers?


What are the eligibility criteria for programs like the FHSA and HBP in Canada?


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