First-Time Home Buyer Programs in Ontario: What's Actually Available

Ontario first-time buyers have three main programs to know about: the First Home Savings Account (FHSA) for tax-advantaged saving, the Home Buyers' Plan (HBP) for tapping your RRSP, and Ontario's (plus Toronto's) land transfer tax rebate for reducing closing costs. They're not mutually exclusive, most first-time buyers can use all three together.

The First Home Savings Account (FHSA)

The FHSA is a federal registered account built specifically for a first home purchase. Contributions are tax-deductible like an RRSP, and withdrawals for a qualifying first home purchase are tax-free like a TFSA, combining both advantages. You can contribute up to $8,000 per year, to a $40,000 lifetime limit. Unused room can carry forward, but only once you've actually opened the account.

The Home Buyers' Plan (HBP)

The HBP lets you withdraw from your RRSP tax-free to put toward a first home, provided you repay it over time. The withdrawal doesn't count as income in the year you take it, but you're required to repay it back into your RRSP over 15 years, or the unrepaid portion gets added to your taxable income each year you miss a payment.

Ontario's land transfer tax rebate

Ontario offers a land transfer tax refund for first-time buyers, applied automatically by your lawyer at closing rather than something you claim separately. If you're buying within the City of Toronto, a second municipal rebate applies on top of the provincial one. Together, they can eliminate land transfer tax entirely on a lower-priced first purchase. Confirm the current eligibility rules and rebate caps with your lawyer, since these are government program details that can change.

Using them together

None of these three programs exclude the others. A typical first-time buyer might save inside an FHSA for a few years, top up their down payment with an HBP withdrawal from an existing RRSP, and then have their rebate applied automatically against land transfer tax at closing, stacking all three without any conflict between them.

FAQ

Do I have to repay FHSA withdrawals?

No. Unlike the Home Buyers' Plan, FHSA withdrawals for a qualifying first home purchase are not repaid, they're simply tax-free, the same as a TFSA withdrawal.

Can I use both the FHSA and the Home Buyers' Plan on the same purchase?

Yes. They're separate programs and can both be used toward the same first home purchase, alongside the land transfer tax rebate.

What counts as a "first-time buyer" for these programs?

Each program sets its own definition, generally centred on not having owned a home you lived in within a recent window of years, but the specifics differ slightly between the FHSA, the HBP, and Ontario's land transfer tax rebate. Check current eligibility for each program directly, since the definitions aren't identical.