First-Time Home Buyer Tax Credits and Incentives in Canada (2026)

Buying your first home is one of the biggest financial milestones in your life. The good news? The Canadian government offers several tax credits and incentives specifically designed to help first-time buyers. Understanding these programs can save you thousands of dollars and make homeownership more affordable.

Who Qualifies as a First-Time Home Buyer?

The CRA defines a first-time home buyer as someone who has not owned a home in the past 4 years (or 5 years for some programs). Specifically:

You (and your spouse/common-law partner) did not own and occupy a home as your principal residence in the year of purchase or the previous 4 calendar years.
If you previously owned a home but sold it more than 4 years ago, you qualify again.
If you're buying with a partner who owned a home recently, you may not qualify for certain programs.

Federal Tax Credits and Programs

1. Home Buyers' Amount (HBA) - $10,000 Tax Credit

The Home Buyers' Amount is a non-refundable tax credit worth $10,000. At the lowest federal tax rate (15%), this saves you $1,500 on your taxes.

How to Claim: Report the purchase on Line 31270 of your T1 tax return in the year you bought the home.

Important: If you're buying with a spouse, only one of you can claim the full $10,000. You cannot split it.

2. RRSP Home Buyers' Plan (HBP)

The Home Buyers' Plan allows you to withdraw up to $60,000 from your RRSP tax-free to use as a down payment. If you're buying with a partner, you can each withdraw $60,000 for a total of $120,000.

Repayment Rules:

You must repay the amount over 15 years, starting the second year after withdrawal.
Minimum repayment is 1/15th of the total each year ($4,000/year if you withdrew $60,000).
If you don't repay the minimum, the shortfall is added to your taxable income for that year.

Pro Tip: Contribute to your RRSP, get the tax deduction, then immediately withdraw it under the HBP. This gives you a tax refund that you can use for your down payment.

3. GST/HST New Housing Rebate

If you're buying a newly built home or substantially renovating a property, you may be eligible for a rebate of up to $6,300 on the GST paid (or up to $24,000 on the federal portion of HST).

Eligibility:

Purchase price must be under $450,000 for the full rebate.
Partial rebate available for homes between $450,000 and $350,000.
The home must be your primary residence.

Provincial and Municipal Programs

Ontario - Land Transfer Tax Rebate

First-time buyers in Ontario can receive a full refund of the provincial land transfer tax, up to a maximum of $4,000.

In Toronto, first-time buyers also get a rebate on the municipal land transfer tax, up to $4,475. Combined, Toronto first-time buyers can save up to $8,475.

British Columbia - First-Time Home Buyers' Program

BC offers a full exemption from the property transfer tax for first-time buyers purchasing homes valued up to $500,000. For homes between $500,000 and $525,000, a partial exemption applies.

This can save you up to $8,000 in property transfer tax.

Alberta - No Provincial Land Transfer Tax

Alberta does not charge a land transfer tax, making it one of the most affordable provinces for home buyers.

Quebec - Home Buyers' Tax Credit

Quebec offers a refundable tax credit of up to $750 for first-time home buyers.

First Home Savings Account (FHSA) - New in 2023

The FHSA is a powerful new savings tool that combines the best features of RRSPs and TFSAs:

Contribution Limit: $8,000 per year, up to a lifetime maximum of $40,000.
Tax Deduction: Contributions are tax-deductible (like an RRSP).
Tax-Free Withdrawal: Withdrawals for a first home purchase are completely tax-free (like a TFSA).
Growth: All investment growth inside the FHSA is tax-free.

Example: You contribute $8,000/year for 5 years ($40,000 total). If you're in the 30% tax bracket, you save $12,000 in taxes. Your investments grow to $50,000. You withdraw the full $50,000 tax-free for your down payment.

Can You Use Both FHSA and HBP? Yes! You can withdraw from both your FHSA and RRSP (via HBP) for the same home purchase.

Common Mistakes to Avoid

Not checking the 4-year rule: If your spouse owned a home 3 years ago, you may not qualify as a first-time buyer.
Forgetting to repay the HBP: Missing a repayment adds that amount to your taxable income, increasing your tax bill.
Claiming the Home Buyers' Amount twice: If you're buying with a spouse, only one of you can claim it.
Not applying for provincial rebates: Many buyers forget to claim land transfer tax rebates, leaving thousands on the table.
Buying a home that's too expensive: Some rebates phase out or disappear for homes over certain price thresholds.

Step-by-Step: Maximizing Your First-Time Buyer Benefits

Open an FHSA and start contributing immediately. Get the tax deduction.
Contribute to your RRSP if you have room, then withdraw via the HBP when you're ready to buy.
Check provincial programs in your area (land transfer tax rebates, property transfer tax exemptions).
Claim the Home Buyers' Amount on your tax return in the year of purchase.
Apply for the GST/HST New Housing Rebate if buying a new build.
Set up automatic HBP repayments to avoid missing the annual minimum.

Key Takeaways

First-time buyers can access up to $60,000 from RRSPs tax-free via the Home Buyers' Plan.
The Home Buyers' Amount provides a $1,500 federal tax credit.
The new FHSA allows $40,000 in tax-deductible contributions with tax-free withdrawals.
Provincial rebates can save you thousands (up to $8,475 in Toronto, $8,000 in BC).
You can combine FHSA, HBP, and provincial programs for maximum savings.
Repay your HBP on time to avoid tax penalties.