First-Time Home Buyer Benefits in Ontario: Your 2026 Guide to Savings

Buying your first home is an exhilarating journey, but it often comes with a significant financial undertaking. The good news for aspiring homeowners in Ontario is that various government programs and incentives are in place to help make that dream a reality. In 2026, with some recent adjustments and ongoing support, understanding these benefits can save you thousands of dollars.

If you’re stepping into the Ontario real estate market for the first time, here’s a comprehensive look at the key benefits you should be aware of.

Who Qualifies as a “First-Time Home Buyer”?

Generally, a “first-time home buyer” in Canada is someone who has not owned a home (or jointly owned a home) in Canada in the last four years. This also applies to your spouse or common-law partner. There are exceptions, such as if you’ve recently experienced a breakdown of a marriage or common-law partnership.

1. Land Transfer Tax (LTT) Rebate

This is one of the most significant benefits for first-time buyers in Ontario. When you purchase a property, you pay a provincial Land Transfer Tax (LTT), calculated on a sliding scale based on the purchase price.

• The Benefit: Eligible first-time home buyers in Ontario can receive a refund of up to $4,000 on the provincial Land Transfer Tax.
• Recent Update: This rebate has remained consistent, offering substantial savings that directly reduce your closing costs.
• How it Works: The rebate is typically applied at the time of closing by your real estate lawyer, so you don’t have to pay the full amount and then wait for a refund.
• City of Toronto LTT: If you are buying in the City of Toronto, there is an additional municipal Land Transfer Tax. Toronto also offers a first-time buyer rebate, which can be up to $4,475.

2. Home Buyers’ Plan (HBP)

The HBP is a federal program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to put towards your down payment.

• The Benefit: You can withdraw up to $35,000 from your RRSPs tax-free (or $70,000 as a couple) for your down payment.
• Recent Update: The maximum withdrawal limit was increased from $25,000 to $35,000 in 2019, providing even greater access to savings.
• How it Works: The withdrawn funds must be repaid to your RRSP over a period of up to 15 years, starting in the second calendar year after the withdrawal. If you miss a payment, that portion becomes taxable income for that year.

3. First Home Savings Account (FHSA)

Introduced in 2023, the FHSA is a game-changer for first-time home buyers, combining the benefits of an RRSP and a TFSA.

• The Benefit: You can contribute up to $8,000 per year (up to a lifetime maximum of $40,000) to an FHSA. Contributions are tax-deductible (like an RRSP), and withdrawals for a qualifying home purchase are tax-free (like a TFSA).
• Recent Update: This is one of the newest and most impactful benefits, designed specifically to help Canadians save for their first home.
• How it Works: You can hold various investments within your FHSA (GICs, mutual funds, stocks). Funds must be used for a qualifying home purchase within 15 years of opening the account, or by age 71. You can also combine the FHSA with the HBP!

4. HST New Housing Rebate

If you’re buying a newly constructed home, you might be eligible for a rebate on the provincial portion of the Harmonized Sales Tax (HST).

• The Benefit: You may be able to reclaim a portion of the 13% HST paid on the purchase of a new home. The rebate is for 36% of the provincial part of the HST (8%), up to a maximum of $24,000, if the purchase price is under $450,000.
• Recent Update: While the core rebate remains, the nuances of new construction and pricing thresholds are important to discuss with your builder and real estate lawyer.
• How it Works: For most new home purchases from a builder, the builder credits the rebate directly to you. If you build a home yourself, you may apply for the rebate after completion.

5. First-Time Home Buyer Incentive (FTHBI) – Update

• Important Note: The First-Time Home Buyer Incentive (FTHBI), a shared-equity mortgage program (where the government took a percentage of your home’s value), was officially discontinued on March 21, 2024. While it was a federal program, it’s crucial for buyers to know it’s no longer available. This highlights the importance of staying current with available programs.

Navigating Your First Purchase in Ontario

The journey to homeownership is exciting, and these benefits are designed to make it more accessible. Understanding which programs apply to your unique situation is crucial for effective financial planning.

Ready to explore your options or have specific questions about how these benefits apply to your first home purchase in Woodstock, Oxford County, or anywhere in Ontario?

Contact me or call +1 (519) 532-6005 to set up a personalized consultation!