2026 Canada First-Time Home Buyer's Guide - Programs & Incentives

Saving for a down payment remains one of the biggest barriers to homeownership in Canada, with nearly 30% of first-time buyers relying on financial help from family members. To ease these costs, governments offer several programs that support first-time buyers. These include savings tools like the First Home Savings Account (FHSA) and the RRSP Home Buyers’ Plan (HBP), tax relief such as the First-Time Home Buyers’ Tax Credit, land transfer tax rebates in some provinces and cities, and select municipal assistance programs. The table below highlights the most common programs available to first-time home buyers in Canada.

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 in April 2023, is a tax-free savings vehicle that helps you save for your first home. It combines features from both Tax Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs): 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. 

Here are the contribution limits of an FHSA:

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

To open a first-time savings account, you'll need to confirm your eligibility and provide government-issued ID and your SIN. When you’re ready to withdraw funds, you must have a signed agreement to purchase a qualifying home. 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). And if you don’t end up buying a home, your savings can be transferred to your RRSP or RRIF without tax penalties. 

RRSP Home Buyers' Plan

The RRSP Home Buyers’ Plan (HBP) lets first-time home buyers withdraw up to $60,000 from their RRSP to use toward a down payment, 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 withdrawal

Withdrawn funds must be repaid to your RRSP 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 repayment, that amount will be added to your taxable income for that year.

While the Home Buyers' Plan in Canada helps reduce upfront costs, using your RRSP can impact your long-term retirement savings, so it’s important to weigh the trade-offs before deciding.

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 claim the credit, enter the amount 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.

GST exemption on newly constructed homes

The federal government has proposed new GST relief for first-time home buyers purchasing newly constructed homes. Under Bill C-4, eligible buyers could receive a full rebate of the 5% Goods and Services Tax (GST) on new homes priced up to $1 million, with the rebate gradually reduced for homes priced between $1 million and $1.5 million.

If implemented, the measure could reduce the upfront cost of buying a new home by up to $50,000. The rebate would apply to newly built or substantially renovated homes that will be used as the buyer’s primary residence. As of early 2026, Bill C-4 has passed the Senate and is awaiting final approval before becoming law.

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. For example, Nova Scotia recently introduced a pilot First-time Homebuyers Program that lowers the minimum down payment to just 2%, compared to the standard 5% required for most insured mortgages. Mortgages are issued through participating credit unions, and the province guarantees 90% of potential lender losses, with interest rates capped at prime plus 2%.

To properly understand what you'll be eligible for in your province, it's worth speaking to a mortgage broker near you.

Provincial land transfer tax rebates

Some Canadian provinces charge a land transfer tax when you buy a house. This tax is generally between 0.5% and 2.0% of the purchase price of the property, and is one of the largest closing cost you'll have to pay. In an effort to help first-time home buyers, certain provinces offer a rebate on some or all of this tax if you're eligible. In some cases, municipalities also provide additional rebates, in addition to the provincial rebate.

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

• Ontario: $4,000
• British Columbia: $8,000
• Prince Edward Island: $2,000
• City of Toronto: $4,475

Home Purchase Assistance Program in Montréal

Some cities also offer their own programs to support first-time home buyers. One example is the Home Purchase Assistance Program in Montréal, which provides financial support to eligible buyers purchasing a home in the city. 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. 

Available assistance includes

• Single buyers (no children): $5,000 for homes up to $305,000.
• Multiple buyers (no children): $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.

Provincial and local first-time home buyer programs in Canada

How first-time buyers combine government programs

Many first-time home buyers use multiple government programs together because each one addresses a different stage of the home-buying process. For example, the First Home Savings Account (FHSA) allows buyers to build tax-advantaged savings over time. When they’re ready to purchase, they may also withdraw funds from their RRSP through the Home Buyers’ Plan (HBP) to further increase their down payment. At closing, buyers may then benefit from programs that reduce upfront costs, such as land transfer tax rebates or the First-Time Home Buyers’ Tax Credit.

For example, a first-time buyer purchasing an $800,000 home in Toronto could combine several programs:

• FHSA savings: $40,000
• RRSP HBP withdrawal: $60,000
• Ontario land transfer tax rebate: up to $4,000
• Toronto municipal land transfer tax rebate: up to $4,475
• First-Time Home Buyers’ Tax Credit: up to $1,500

Together, these programs could provide more than $100,000 in support. Additionally, comparing mortgage rates at Ratehub.ca can also help reduce the overall cost of buying a home.

Support for newcomers buying their first home in Canada

Newcomers can access many of the same home buying programs as other Canadians, but there are a few additional factors to consider when entering the housing market. Most lenders will require proof of income, employment history, and immigration status, such as a permanent resident card or work permit.

Key things newcomers should keep in mind:

• Understand minimum down payment rules: Buyers must put down 5% for homes under $500,000, 10% for the portion between $500,000 and $1.5 million, and 20% for homes above $1.5 million. Buyers putting down less than 20% must obtain mortgage default insurance.
• Build or transfer your credit history: A Canadian credit history can help you qualify for better mortgage rates. Opening a secured credit card and making regular payments can help establish credit. Some lenders may also accept international credit reports.
• Plan for closing costs: In addition to the down payment, buyers should budget for closing costs such as legal fees, home inspections, title insurance, and property taxes. These expenses typically add 1.5% to 4% of the home’s purchase price.
• Be aware of additional taxes: 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.
• Look into newcomer mortgage programs: Mortgage insurers like CMHC, Sagen, and Canada Guaranty offer programs that can help newcomers qualify for financing even with limited Canadian credit history.

New to Canada? You can also explore Ratehub.ca’s financial resources for newcomers to learn more about mortgages, credit, and home buying in Canada.