First-Time Home Buyer Guide: Canadian Government Programs (2024–2025)

This article is general information, not financial or legal advice. Program rules change; confirm your situation with a qualified advisor or the relevant government body before making decisions.

Buying your first home in Canada comes with a meaningful set of government programs designed to reduce the cost of getting in. Most buyers leave money on the table — not because the programs don't apply, but because the rules are scattered across CRA, CMHC, and provincial agencies. This guide pulls them into one place, with honest notes on what's active, what has closed, and what to do with each.

Before you get into programs, know your numbers: the mortgage affordability calculator, down payment calculator, CMHC insurance calculator, and mortgage stress test calculator cover the purchase math. Land transfer tax is covered in the land transfer tax calculator.

The four programs that matter most

1. First Home Savings Account (FHSA) — the anchor program

The FHSA is the newest and most powerful tool for first-time buyers saving toward a purchase. It opened April 1, 2023. Contributions are tax-deductible (like an RRSP) and growth plus qualifying withdrawals are tax-free (like a TFSA). That combination — deduction on the way in, nothing owed on the way out for a home purchase — makes it unlike any other account.

Key numbers:

Annual contribution limit: $8,000
Lifetime contribution limit: $40,000
Account lifespan: 15 years from opening (or until you turn 71, whichever comes first)
Unused annual room carries forward (maximum carry-forward in any year: $8,000)

Eligibility: Canadian resident, 18 or older, and you must not have owned a principal residence in the year you open the account or in the four preceding calendar years (the "first-time buyer" test).

Qualifying withdrawal: Tax-free and penalty-free if you have a written agreement to buy or build a qualifying first home in Canada and intend to occupy it as your principal residence by October 1 of the year following the year of withdrawal. You can use the FHSA and the Home Buyers' Plan on the same purchase.

If you never buy a home: Transfer the balance to your RRSP or RRIF without needing RRSP room. Do not withdraw non-qualifying — that amount is added to your taxable income.

See our full deep-dive: FHSA Canada: The Complete Guide.

2. Home Buyers' Plan (HBP) — RRSP withdrawal for your down payment

The HBP lets you withdraw from your RRSP tax-free to put toward a first home purchase. The Budget 2024 limit increase applies to withdrawals made on or after April 16, 2024.

Key numbers:

Maximum withdrawal per person: $60,000 (raised from $35,000 in Budget 2024 via Bill C-69)
Couples: each qualifying person can withdraw up to $60,000 — up to $120,000 combined
Repayment period: 15 years, starting the second year after withdrawal (or the fifth year for withdrawals made between January 1, 2022 and December 31, 2025 — Budget 2024 extended the grace period; this extension also applies for first withdrawals between January 1, 2026 and December 31, 2028)
Repayments are 1/15th of the amount withdrawn per year; missed repayments are added to taxable income that year

Eligibility: You must be a first-time buyer (no principal residence owned by you or your spouse/common-law partner in the four preceding years), have a written purchase or build agreement, and plan to occupy the home as your principal residence within one year of acquisition.

Note on RRSP contribution timing: Funds deposited within 90 days before the HBP withdrawal do not qualify — only contributions that have been in the RRSP for at least 90 days count.

The HBP and FHSA can be combined on the same purchase. Between the two, a couple with maxed FHSAs and RRSPs could access well over $100,000 in tax-free or deferred funds for a down payment.

See our full deep-dive: Home Buyers' Plan (HBP): RRSP Withdrawal for a First Home.

3. First-Time Home Buyer Incentive — closed March 2024

⚠️ This program is no longer accepting new applications. The Government of Canada wound down the First-Time Home Buyer Incentive in March 2024, with the last closing date for new applications being March 21, 2024. Existing participants with approved applications and closings before the deadline were not affected.

The program was a shared-equity mortgage: CMHC contributed 5% (or 10% for newly built homes) of the purchase price toward your down payment in exchange for an equivalent ownership stake. When you sold or after 25 years (whichever came first), you repaid CMHC's share at the market value at that time, not the amount originally received.

Because CMHC's repayment was market-value-based, buyers in rising markets sometimes owed more than they received — one reason the program attracted criticism and was eventually wound down.

What to use instead: If you were counting on the FTHBI, the FHSA and HBP are the live alternatives. For lower income buyers, provincial programs (Ontario's Land Transfer Tax Rebate, BC's Property Transfer Tax Exemption, and others) reduce closing costs. See our full explainer: First-Time Home Buyer Incentive: What Happened and What to Do Instead.

4. Principal Residence Exemption — no capital gains on your home

When you sell a home that qualifies as your principal residence, the gain is generally exempt from capital gains tax. For most first-time buyers who live in their home the whole time they own it, this is automatic — but there are rules worth knowing before you sell.

Reporting requirement (since 2016): CRA requires you to report the sale of your principal residence on Schedule 3 of your tax return (and Form T2091 if only some years are designated), even if no tax is owed. Failing to report can result in a late-designation penalty.

The "+1 rule": The exemption formula includes a "+1" that allows you to designate an extra year beyond the years you actually occupied the home as your principal residence. This bridges situations like buying a new home before selling the old one, or occupying a newly built home before it technically became yours.

The residential property flipping rule (January 1, 2023): If you sell a property within 365 days of acquiring it, the gain is treated as business income, not a capital gain — and the principal residence exemption does not apply, regardless of whether you lived there. Exceptions exist for certain life events (death, marital breakdown, job relocation, disability), but the burden falls on you to document them.

See our full deep-dive: Principal Residence Exemption Canada: How It Works.

Land transfer tax rebates

Most provinces charge a land transfer tax when you buy a home. First-time buyers get partial or full relief in several jurisdictions:

Ontario: Rebate of up to $4,000 on the provincial land transfer tax. Applies to new and resale homes.
Toronto: Additional municipal land transfer tax rebate of up to $4,475 (on top of the Ontario rebate). Toronto buyers can potentially receive both.
British Columbia: Full exemption from Property Transfer Tax on the first $500,000 of value for homes worth up to $835,000 (updated April 1, 2024). Partial exemption for homes valued $835,000–$860,000.

The land transfer tax calculator handles this math for Ontario, Toronto, BC, Quebec, Montreal, and Manitoba — toggle the first-time buyer option to see the rebate.

For a complete guide, see Land Transfer Tax Rebate for First-Time Buyers.

Closing costs in Ontario: what to budget

Land transfer tax is the largest closing cost for most buyers, but it is not the only one. A typical Ontario purchase also includes:

Legal fees: $1,500–$3,000 for a real estate lawyer
Home inspection: $400–$800
Title insurance: $200–$400
Mortgage appraisal: $300–$600 (sometimes waived by lenders)
CMHC insurance provincial sales tax: In Ontario, 8% PST on the CMHC insurance premium (the premium itself is added to the mortgage; the PST is paid at closing)
Property tax and utility adjustments: Prorated at closing

See the full breakdown: Closing Costs in Ontario: A First-Time Buyer's Checklist.

Property tax in Ontario

Property tax is an ongoing cost, not a one-time closing item, but first-time buyers often underestimate it. Ontario municipalities set their own rates, and they vary significantly — from under 0.5% in some parts of the GTA to over 1.5% in smaller municipalities. The annual amount is the assessed value (set by MPAC) multiplied by the municipality's combined tax rate (education + municipal mill rates).

New builds assessed after purchase may see a large upward reassessment at the first MPAC review, so the first-year property tax shown by the seller or developer can be lower than what you will pay once the home is fully assessed.

See: Property Tax in Ontario: How It Works for Homeowners.

Stacking the programs: what a typical buyer captures

A buyer purchasing a $650,000 home in Toronto with a partner could, in principle, access:

Up to $80,000 from two FHSAs (if both are maxed to the $40,000 lifetime limit)
Up to $120,000 from two HBPs (at the new $60,000 limit per person)
Up to $8,475 in land transfer tax rebates (Ontario $4,000 + Toronto $4,475)

The FHSA and HBP can be used on the same purchase. CMHC insurance applies if the combined down payment is below 20%, so stacking these programs to reach 20% or more eliminates the insurance cost entirely.

Program summary table

| Program | Status | Max benefit | Who it's for | |---|---|---|---| | First Home Savings Account (FHSA) | Active | $40,000 lifetime tax-free savings | First-time buyers saving toward a purchase | | Home Buyers' Plan (HBP) | Active | $60,000 per person RRSP withdrawal | First-time buyers with existing RRSP savings | | First-Time Home Buyer Incentive | Closed (March 2024) | Was 5–10% shared equity | No longer available | | Ontario LTT Rebate | Active | Up to $4,000 | First-time buyers purchasing in Ontario | | Toronto MLTT Rebate | Active | Up to $4,475 | First-time buyers purchasing in Toronto | | BC PTT Exemption | Active | Full exemption (homes ≤$835K) | First-time buyers in British Columbia | | Principal Residence Exemption | Active | Full capital gains exemption on sale | All homeowners who occupy as principal residence |

Frequently asked questions

What programs are available for first-time home buyers in Canada?

The main active federal programs are the First Home Savings Account (FHSA) and the Home Buyers' Plan (HBP). The First-Time Home Buyer Incentive closed in March 2024. Most provinces also offer land transfer tax rebates or exemptions for first-time buyers, including Ontario and British Columbia.

What is the first-time home buyer limit in Canada?

There is no single income or price limit for all programs. The FHSA is open to any eligible first-time buyer (Canadian resident, 18+, no principal residence owned in the current or prior four years). The HBP has no income cap. CMHC-insured mortgages are capped at homes priced under $1,500,000.

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

Yes. The FHSA and HBP can be combined on a single first-home purchase. A couple could access up to $40,000 each from FHSAs ($80,000 total) and up to $60,000 each from HBPs ($120,000 total) — potentially $200,000 in tax-free or tax-deferred funds toward a down payment.

Is the First-Time Home Buyer Incentive still available?

No. The Government of Canada wound down the First-Time Home Buyer Incentive in March 2024. New applications were no longer accepted after March 21, 2024. Buyers who were counting on it should look to the FHSA, HBP, and provincial land transfer tax rebates instead.

Do first-time buyers pay land transfer tax?

Often less, or nothing on a lower-priced home. Ontario rebates up to $4,000, Toronto adds up to $4,475 more, and BC fully exempts the first $500,000 of value for qualifying homes up to $835,000. See the land transfer tax calculator to see the exact amount for your purchase.