Loading...Buying a home in Ontario is not easy, especially if it’s your first one and being able to buy your first home in Ontario is a significant milestone. While prices have come down a bit since 2021-2022’s peak, prices across the GTA are still high. As a first-time buyer, the experience can be stressful with all of the things you’re trying to take into consideration. Some buyers may not be aware of all of the government programs and tax savings that could be available. In particular, many buyers are also considering the new HST relief that makes buying new or pre-construction homes more financially advantageous than it has been in years.
What Counts as a First-Time Home Buyer in Ontario?
The term “first-time home buyer” in Ontario actually has a set of criteria that must be met in order for certain programs to be applicable to them. The general rule is that the individual must not have owned a home used as a principal residence anywhere in the world in the past four years. Additionally, each incentive/grant/program may have specific eligibility criteria so make sure you check the program requirements before you assume you can be part of it. There are even some programs that extend eligibility to those who have experienced a relationship breakdown.
Fun fact: did you know you can still be considered a first-time home buyer even if you have bought a home? If you bought a property and have only rented it out as an investment property, it is not considered your principal residence, so for some programs you can still be considered a FTHB once you purchase a home that you will use as your principal residence.
The First Home Savings Account (FHSA)
A First Home Savings Account is a registered savings account that allows first-time buyers to save up to $40,000 tax-free toward a first home. In the first year that you open your FHSA, you’re allowed to contribute $8000. Each year, you accumulate $8000 in new contribution room and you can carry up to $8000 of unused contribution room to the next year. That means in a single year, you can’t contribute more than $16,000. And if there’s any confusion as to how much you can contribute, you can check on your Notice of Assessment or log into your Canada Revenue Agency account. Contributions are tax-deductible (like an RRSP); and withdrawals for a qualifying home purchase are tax-free (like a TFSA). This is one of the most powerful tools available to first-time buyers in 2026. The investments that are held in the FHSA will have time to grow over the years tax-free, while the money that is put in there is tax-deductible.
The Home Buyers’ Plan (HBP)
The Home Buyer’s Plan is another program first-time buyers can take advantage of and it allows them to withdraw up to $60,000 from their RRSP tax-free for a home purchase. This means that whatever profits you have earned in your RRSP investment won’t be taxed. This amount has increased from the previous $35,000 withdrawal limit in 2024. For couples, that’s a combined $120,000 available from RRSPs. However, there are some rules for this program – the withdrawn funds must be repaid over 15 years beginning five years after withdrawal (It was previously a 2-year time limit). Combining the potential savings of the HBP and FHSA can be a great way to save a lot of money for a first time home buyer in Ontario.
HST/GST Rebates for New Homes in Ontario (2026 Update)
The First-time Home Buyers’ (FTHB) GST/HST Rebate
The FTHB GST/HST Rebate gives first time buyers the federal part of the HST (which is the GST) back to buyers on new homes valued up to $1 million. If you are purchasing your first home, you might qualify for the FTHB GST/HST rebate alongside the standard GST/HST new housing rebate. In cases where both programs apply, the FTHB rebate functions as a supplemental top-up to the existing new housing rebate. This was the original program and was only for first-time buyers.
Announced in the end of March 2026, the new Ontario expanded HST rebate temporarily removes the provincial 8% HST and 5% federal GST on new homes up to $1 million. This is on new builds for purchase agreements signed between April 1, 2026 and March 30, 2027 and is a major talking point for buyers right now. Buyers of qualifying new construction homes can save up to $130,000 in HST on a $1M home under the new rules and it is not limited to first-time home buyers. This makes 2026 a uniquely advantageous time to purchase a new or pre-construction home in Ontario.
Ontario Land Transfer Tax Refund
When you purchase a property in Ontario, you need to pay a land transfer tax. For first-time buyers, you may receive a full refund of the provincial land transfer tax of up to $4,000. Furthermore, for those who purchase a property in Toronto, you;ll also need to take into consideration the municipal land transfer tax. Toronto buyers can receive a separate rebate of this municipal land transfer tax of up to $$4,475. The refund(s) are applied at closing and will reduce the upfront cash needed.
Here’s a simple example of how the land transfer taxes would cost and the refunds you would receive if you purchased a $800,000 property in Toronto, Ontario as a first-time home buyer:
Purchase price: $800,000
Toronto land transfer tax: $12,475
Provincial land transfer tax: $12,475
Municipal land transfer tax rebate: $4,000
Provincial land transfer tax refund: $4,475
Total land transfer tax still owed: $16,475
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GST/HST New Residential Rental Property Rebate
The GST/HST new residential rental property rebate is a program intended for investors. It is often confused with the New Home HST Rebate, but this one if specifically for owners who don’t intend to live in the property that they purchase. There are certain requirements that the owner will need in order to qualify, and they will have to apply for the rebate an provide proof of the property has been rented out (i.e. agreement to lease). This is relevant for GTA investors buying pre-construction homes in Toronto, Markha, Vaughan, Mississauga and beyond.
The First-Time Home Buyer Incentive (FTHBI) — Program Status
You may have heard about the First-Time Home Buyer Incentive before, but this program ended in March 2024. Previously, the FTHBI program allowed first-time home buyers to reduce their monthly mortgage payments. The program contributed 5-10% toward a home purchase reducing the size of the buyer’s mortgage while the government would hold the same percentage of stake in the home and when it’s sold – the buyer had to repay the government. Now that it has ended, the FHSA and HBP are the current replacements. Argumentiatively, these two programs provide better value to first-time time buyers by enabling them to increase their down payment savings.
How to Stack Multiple Incentives
You might be wondering how you take advantage of all of the different programs. Here are the steps you could take to optimize your savings:
- FHSA + HBP: Use these as the most effective way to save for a down payment. Instead of keeping your money in a non-registered account or in a simple checking/savings account – use your FHSA + HBP to grow your investments – all tax-efficient.
- You’ll be able to get your land transfer tax refund(s) at closing. Make sure your real estate lawyer goes over this with you.
- Claim the Home buyer’s amount on your next tax return after purchasing your new home
- If you’re buying a new build or pre-construction in 2026:
- Get the new HST rebate (more details will be released in the future as to how to apply for it if needed)
- If you don’t intend to live in the property, file for the GST/HST new residential rental property rebate.
Tips for First-Time Buyers in the GTA’s 2026 Market
For the first time in a very long time, GTA has shifted to a buyer’s market giving buyers more negotiating power than in previous years. For first-time buyers, pre-construction is worth considering given the new HST relief especially in cities like Markham and Toronto where the markets have remained strong. As a first-time buyer, working with a real estate agent who is experienced in first-time buyer transactions to understand how programs apply to your purchase. Also, get pre-approved before you go shopping for a home as programs like the HBP require funds to have been in the RRSP for at least 90 days.
Conclusion
In 2026, there are many incentives that first-time home buyers can be a part of including the FHSA, HBP, Land Transfer Tax Refunds, HBTC, and the new HST Rebate. In particular, this year is especially appealing with the new HST relief in effect. When you’re ready to take your first step towards home ownership, speak with a real estate agent, accountant, and mortgage professional to understand exactly which programs you qualify for. Here at Big City Realty, we work with first-time buyers across the GTA.