First-Time Home Buyer Incentives in Canada: FHSA, Rebates & Equity Programs Explained
Jul 16, 2025
Blog
Buying your first home is a major milestone—and for many Canadians, it can also be a financial challenge. With rising home prices and high borrowing costs, getting a foot in the housing market may feel overwhelming. The good news? There are several government-backed incentives designed to support first-time buyers and reduce the upfront costs of homeownership.
In this guide, we’ll break down the most important programs available across Canada, including the First Home Savings Account (FHSA), Home Buyers’ Plan (HBP), shared equity programs, and tax rebates. Whether you’re just beginning to explore the market or getting ready to make an offer, here’s what you need to know.
Who Qualifies as a First-Time Home Buyer in Canada?
To access most of the programs outlined below, you’ll need to meet Canada’s definition of a “first-time home buyer.” In general, this means:
You have never owned a home or lived in a home owned by your spouse or common-law partner in the last four years.
You are a Canadian resident and at least 18 years of age (for FHSA eligibility).
You intend to live in the property as your principal place of residence within a year of purchase.
Always check the fine print for each program, as eligibility requirements can vary slightly.
1. First Home Savings Account (FHSA)
Launched in 2023, the FHSA is a powerful new savings tool that combines the tax benefits of an RRSP and a TFSA—specifically for first-time home buyers.
How it works:
Annual contribution limit: $8,000
Lifetime limit: $40,000
Contributions are tax-deductible, and withdrawals are tax-free if used to buy a qualifying home.
Why it matters:
You get a double benefit: saving on taxes now and withdrawing funds without penalties later. You can open an FHSA at most financial institutions, and unused contribution room carries forward.
Bonus tip:
You can combine the FHSA with other programs like the Home Buyers’ Plan for even more savings.
2. Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows you to withdraw funds from your RRSP to help purchase or build your first home, without paying tax on the withdrawal.
Key features:
Withdraw up to $35,000 from your RRSP (or $70,000 per couple).
Repayment period: 15 years, starting the second year after purchase.
Must be repaid annually to avoid being taxed on the withdrawn amount.
Who it’s for:
First-time buyers with existing RRSP savings who need immediate access to a down payment without long-term penalties.
3. First-Time Home Buyer Incentive (Shared Equity Program)
Offered through CMHC, this federal program helps first-time buyers by contributing to your down payment in exchange for a shared equity stake in your home.
What it offers:
5% (existing homes) or 10% (new builds) of the purchase price
No interest or regular payments required
Repayment due when the home is sold or after 25 years
Eligibility:
Household income must be under $120,000 ($150,000 in certain areas)
Loan must be less than 4 to 4.5 times your income
The home must be in Canada and your primary residence
Considerations:
While it can lower monthly mortgage payments, you’ll be sharing a portion of your home’s future value with the government when it’s time to sell.
4. Land Transfer Tax Rebates
One of the most overlooked costs in buying a home is the land transfer tax, which applies in most provinces. Fortunately, rebates are available for first-time buyers.
Federal and Provincial Options:
Ontario: Up to $4,000
British Columbia: Up to $8,000 (on homes under $500,000)
Toronto (municipal): Additional rebate of up to $4,475
How to claim it:
Your lawyer or notary can apply for the rebate during the closing process. In most cases, it reduces the amount you pay upfront.
5. GST/HST New Housing Rebate
If you're purchasing a newly built home, a home that has undergone major renovations, or building your own home, you may qualify for a partial rebate of the GST or the federal portion of HST.
Eligibility highlights:
Applies to homes with a fair market value of $350,000 or less (federal portion), with a reduced rebate available up to $450,000
Must be your primary residence
Some provinces (like Ontario and BC) also offer their own provincial GST/HST rebates, so be sure to check your region.
6. Provincial and Regional First-Time Buyer Incentives
In addition to national programs, many provinces offer their own down payment assistance or low-interest loan programs to first-time buyers.
Here are a few examples:
Nova Scotia
Program: Down Payment Assistance Program
Benefit: Interest-free loans up to 5% of the purchase price
Québec
Program: Home Ownership Program
Benefit: Up to $15,000 in financial assistance (for families)
Prince Edward Island (PEI)
Program: First-Time Home Buyers Program
Benefit: $2,000 tax credit
Saskatchewan
Program: First Home Plan
Benefit: Up to $10,000 toward a down payment (student loan matching)
Note: Programs may change based on budget cycles. Always verify the latest details through official provincial websites.
7. How to Combine These Incentives for Maximum Benefit
The true power of these programs lies in using them together:
Open an FHSA to save with tax advantages
Withdraw up to $35K from your RRSP through the HBP
Apply for the CMHC Shared Equity Program to reduce monthly mortgage payments
Claim available land transfer tax rebates
Take advantage of GST/HST or provincial housing rebates
Example Scenario:
A couple opens two FHSAs and each withdraws $35,000 from their RRSPs. They also receive 5% from the CMHC incentive and claim a $4,000 land transfer rebate. Combined, they could reduce their upfront costs by over $80,000 depending on the home and location.
Conclusion: Take the First Step with Confidence
Becoming a homeowner in Canada may seem daunting, but the support is out there if you know where to look. These programs were created to make your first home purchase more affordable—and they can make a big difference when used strategically.
Before making a decision, speak with a mortgage advisor or financial planner who can walk you through the options and help you apply for the incentives that best fit your situation.
This article is for informational purposes only and is not financial or legal advice nor a substitute for legal counsel.
Buying your first home is a major milestone—and for many Canadians, it can also be a financial challenge. With rising home prices and high borrowing costs, getting a foot in the housing market may feel overwhelming. The good news? There are several government-backed incentives designed to support first-time buyers and reduce the upfront costs of homeownership.
In this guide, we’ll break down the most important programs available across Canada, including the First Home Savings Account (FHSA), Home Buyers’ Plan (HBP), shared equity programs, and tax rebates. Whether you’re just beginning to explore the market or getting ready to make an offer, here’s what you need to know.
Who Qualifies as a First-Time Home Buyer in Canada?
To access most of the programs outlined below, you’ll need to meet Canada’s definition of a “first-time home buyer.” In general, this means:
You have never owned a home or lived in a home owned by your spouse or common-law partner in the last four years.
You are a Canadian resident and at least 18 years of age (for FHSA eligibility).
You intend to live in the property as your principal place of residence within a year of purchase.
Always check the fine print for each program, as eligibility requirements can vary slightly.
1. First Home Savings Account (FHSA)
Launched in 2023, the FHSA is a powerful new savings tool that combines the tax benefits of an RRSP and a TFSA—specifically for first-time home buyers.
How it works:
Annual contribution limit: $8,000
Lifetime limit: $40,000
Contributions are tax-deductible, and withdrawals are tax-free if used to buy a qualifying home.
Why it matters:
You get a double benefit: saving on taxes now and withdrawing funds without penalties later. You can open an FHSA at most financial institutions, and unused contribution room carries forward.
Bonus tip:
You can combine the FHSA with other programs like the Home Buyers’ Plan for even more savings.
2. Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows you to withdraw funds from your RRSP to help purchase or build your first home, without paying tax on the withdrawal.
Key features:
Withdraw up to $35,000 from your RRSP (or $70,000 per couple).
Repayment period: 15 years, starting the second year after purchase.
Must be repaid annually to avoid being taxed on the withdrawn amount.
Who it’s for:
First-time buyers with existing RRSP savings who need immediate access to a down payment without long-term penalties.
3. First-Time Home Buyer Incentive (Shared Equity Program)
Offered through CMHC, this federal program helps first-time buyers by contributing to your down payment in exchange for a shared equity stake in your home.
What it offers:
5% (existing homes) or 10% (new builds) of the purchase price
No interest or regular payments required
Repayment due when the home is sold or after 25 years
Eligibility:
Household income must be under $120,000 ($150,000 in certain areas)
Loan must be less than 4 to 4.5 times your income
The home must be in Canada and your primary residence
Considerations:
While it can lower monthly mortgage payments, you’ll be sharing a portion of your home’s future value with the government when it’s time to sell.
4. Land Transfer Tax Rebates
One of the most overlooked costs in buying a home is the land transfer tax, which applies in most provinces. Fortunately, rebates are available for first-time buyers.
Federal and Provincial Options:
Ontario: Up to $4,000
British Columbia: Up to $8,000 (on homes under $500,000)
Toronto (municipal): Additional rebate of up to $4,475
How to claim it:
Your lawyer or notary can apply for the rebate during the closing process. In most cases, it reduces the amount you pay upfront.
5. GST/HST New Housing Rebate
If you're purchasing a newly built home, a home that has undergone major renovations, or building your own home, you may qualify for a partial rebate of the GST or the federal portion of HST.
Eligibility highlights:
Applies to homes with a fair market value of $350,000 or less (federal portion), with a reduced rebate available up to $450,000
Must be your primary residence
Some provinces (like Ontario and BC) also offer their own provincial GST/HST rebates, so be sure to check your region.
6. Provincial and Regional First-Time Buyer Incentives
In addition to national programs, many provinces offer their own down payment assistance or low-interest loan programs to first-time buyers.
Here are a few examples:
Nova Scotia
Program: Down Payment Assistance Program
Benefit: Interest-free loans up to 5% of the purchase price
Québec
Program: Home Ownership Program
Benefit: Up to $15,000 in financial assistance (for families)
Prince Edward Island (PEI)
Program: First-Time Home Buyers Program
Benefit: $2,000 tax credit
Saskatchewan
Program: First Home Plan
Benefit: Up to $10,000 toward a down payment (student loan matching)
Note: Programs may change based on budget cycles. Always verify the latest details through official provincial websites.
7. How to Combine These Incentives for Maximum Benefit
The true power of these programs lies in using them together:
Open an FHSA to save with tax advantages
Withdraw up to $35K from your RRSP through the HBP
Apply for the CMHC Shared Equity Program to reduce monthly mortgage payments
Claim available land transfer tax rebates
Take advantage of GST/HST or provincial housing rebates
Example Scenario:
A couple opens two FHSAs and each withdraws $35,000 from their RRSPs. They also receive 5% from the CMHC incentive and claim a $4,000 land transfer rebate. Combined, they could reduce their upfront costs by over $80,000 depending on the home and location.
Conclusion: Take the First Step with Confidence
Becoming a homeowner in Canada may seem daunting, but the support is out there if you know where to look. These programs were created to make your first home purchase more affordable—and they can make a big difference when used strategically.
Before making a decision, speak with a mortgage advisor or financial planner who can walk you through the options and help you apply for the incentives that best fit your situation.
This article is for informational purposes only and is not financial or legal advice nor a substitute for legal counsel.
Buying your first home is a major milestone—and for many Canadians, it can also be a financial challenge. With rising home prices and high borrowing costs, getting a foot in the housing market may feel overwhelming. The good news? There are several government-backed incentives designed to support first-time buyers and reduce the upfront costs of homeownership.
In this guide, we’ll break down the most important programs available across Canada, including the First Home Savings Account (FHSA), Home Buyers’ Plan (HBP), shared equity programs, and tax rebates. Whether you’re just beginning to explore the market or getting ready to make an offer, here’s what you need to know.
Who Qualifies as a First-Time Home Buyer in Canada?
To access most of the programs outlined below, you’ll need to meet Canada’s definition of a “first-time home buyer.” In general, this means:
You have never owned a home or lived in a home owned by your spouse or common-law partner in the last four years.
You are a Canadian resident and at least 18 years of age (for FHSA eligibility).
You intend to live in the property as your principal place of residence within a year of purchase.
Always check the fine print for each program, as eligibility requirements can vary slightly.
1. First Home Savings Account (FHSA)
Launched in 2023, the FHSA is a powerful new savings tool that combines the tax benefits of an RRSP and a TFSA—specifically for first-time home buyers.
How it works:
Annual contribution limit: $8,000
Lifetime limit: $40,000
Contributions are tax-deductible, and withdrawals are tax-free if used to buy a qualifying home.
Why it matters:
You get a double benefit: saving on taxes now and withdrawing funds without penalties later. You can open an FHSA at most financial institutions, and unused contribution room carries forward.
Bonus tip:
You can combine the FHSA with other programs like the Home Buyers’ Plan for even more savings.
2. Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows you to withdraw funds from your RRSP to help purchase or build your first home, without paying tax on the withdrawal.
Key features:
Withdraw up to $35,000 from your RRSP (or $70,000 per couple).
Repayment period: 15 years, starting the second year after purchase.
Must be repaid annually to avoid being taxed on the withdrawn amount.
Who it’s for:
First-time buyers with existing RRSP savings who need immediate access to a down payment without long-term penalties.
3. First-Time Home Buyer Incentive (Shared Equity Program)
Offered through CMHC, this federal program helps first-time buyers by contributing to your down payment in exchange for a shared equity stake in your home.
What it offers:
5% (existing homes) or 10% (new builds) of the purchase price
No interest or regular payments required
Repayment due when the home is sold or after 25 years
Eligibility:
Household income must be under $120,000 ($150,000 in certain areas)
Loan must be less than 4 to 4.5 times your income
The home must be in Canada and your primary residence
Considerations:
While it can lower monthly mortgage payments, you’ll be sharing a portion of your home’s future value with the government when it’s time to sell.
4. Land Transfer Tax Rebates
One of the most overlooked costs in buying a home is the land transfer tax, which applies in most provinces. Fortunately, rebates are available for first-time buyers.
Federal and Provincial Options:
Ontario: Up to $4,000
British Columbia: Up to $8,000 (on homes under $500,000)
Toronto (municipal): Additional rebate of up to $4,475
How to claim it:
Your lawyer or notary can apply for the rebate during the closing process. In most cases, it reduces the amount you pay upfront.
5. GST/HST New Housing Rebate
If you're purchasing a newly built home, a home that has undergone major renovations, or building your own home, you may qualify for a partial rebate of the GST or the federal portion of HST.
Eligibility highlights:
Applies to homes with a fair market value of $350,000 or less (federal portion), with a reduced rebate available up to $450,000
Must be your primary residence
Some provinces (like Ontario and BC) also offer their own provincial GST/HST rebates, so be sure to check your region.
6. Provincial and Regional First-Time Buyer Incentives
In addition to national programs, many provinces offer their own down payment assistance or low-interest loan programs to first-time buyers.
Here are a few examples:
Nova Scotia
Program: Down Payment Assistance Program
Benefit: Interest-free loans up to 5% of the purchase price
Québec
Program: Home Ownership Program
Benefit: Up to $15,000 in financial assistance (for families)
Prince Edward Island (PEI)
Program: First-Time Home Buyers Program
Benefit: $2,000 tax credit
Saskatchewan
Program: First Home Plan
Benefit: Up to $10,000 toward a down payment (student loan matching)
Note: Programs may change based on budget cycles. Always verify the latest details through official provincial websites.
7. How to Combine These Incentives for Maximum Benefit
The true power of these programs lies in using them together:
Open an FHSA to save with tax advantages
Withdraw up to $35K from your RRSP through the HBP
Apply for the CMHC Shared Equity Program to reduce monthly mortgage payments
Claim available land transfer tax rebates
Take advantage of GST/HST or provincial housing rebates
Example Scenario:
A couple opens two FHSAs and each withdraws $35,000 from their RRSPs. They also receive 5% from the CMHC incentive and claim a $4,000 land transfer rebate. Combined, they could reduce their upfront costs by over $80,000 depending on the home and location.
Conclusion: Take the First Step with Confidence
Becoming a homeowner in Canada may seem daunting, but the support is out there if you know where to look. These programs were created to make your first home purchase more affordable—and they can make a big difference when used strategically.
Before making a decision, speak with a mortgage advisor or financial planner who can walk you through the options and help you apply for the incentives that best fit your situation.
This article is for informational purposes only and is not financial or legal advice nor a substitute for legal counsel.
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