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A Guide for First-Time Home Buyers

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First-Time Home Buyers: Frequently asked questions

How do I qualify as a first-time home buyer in Canada?

How much do I need for a down payment as a first-time home buyer?

What is the Canadian government incentive for first-time home buyers?

What is the maximum RRSP contribution amount for a first-time home buyer?

What is the FHSA limit in Canada?

What bank has FHSA in Canada?

Jamie David

Buying your first home can be both exciting and stressful. It also tends to be very expensive, especially if you don't have any pre-existing assets to help you get a mortgage, as is the case with most first-time home buyers in Canada. Instead, you'll rely heavily on your savings to pay for your down payment, and for the closing costs that come with buying a house.

In an effort to make buying your first home easier, the Canadian government offers a variety of incentives for first-time home buyers. First-time home buyers in Ontario, BC, Prince Edward Island and the City of Toronto, for example, can qualify for a land transfer tax rebate. That's just one of many different first-time home buyer programs you may be eligible for.

This page includes all of the resources you'll need to get started on your home buying journey. Find out more about first-time home buyer tax credits and rebates, grants and programs available in Canada, including the newest federal program, the First Home Savings Account. There are also some helpful links to our provincial first-time home buyer pages, where you can learn more about the various incentives and programs available at the provincial level. 

You can get started with the helpful video below, and then read on for more information.


What are the criteria for first-time home buyers in Canada?

To qualify for the various federal and provincial first-time home buyer tax credits and programs in Canada, there are a number of criteria that need to be met. Each program has a different set of criteria. However, there are a number of criteria pertaining to age, citizenship status, recency of home purchase, and home occupancy that are generally similar among them. For federal programs such as the First Time Home Buyers’ Tax Credit and the RRSP Home Buyers’ Plan, the following apply: 

  • You must be at least 18 years of age
  • You must be a Canadian citizen or permanent resident
  • The property/home you bought must be in Canada
  • You cannot have owned a home within the last four years
  • If you're buying with a spouse (or common law partner) who is not a first-time homebuyer, you cannot have lived in a house that they owned within the last 4 years
  • You must have documentation verifying that you have purchased a home
  • You must intend to live in the home as your primary residence within one year of purchase

The First-Time Home Buyer Incentive program in particular has more restrictive criteria pertaining to your mortgage loan amount versus your household income. 

Make sure to read the information on our site about the various federal and provincial first-time home buyer programs and incentives to get more specific eligibility information.

A guide to programs for first-time home buyers

Below you'll find a detailed summary of the most important programs available to first-time home buyers in Canada. Follow the links to dedicated articles on the programs for more detailed information.

First Home Savings Account

In its budget, the federal government announced the creation of a new program to help buyers save for their first home. The First Home Savings Account, or FHSA, combines features of the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP), with some advantages over both. As with RRSPs, your contributions to your FHSA are tax-free, and as with TFSAs, any money your First Home Savings Account earns will also be tax-free. Unlike an RRSP, you don't have to pay yourself back for money you withdraw from the FHSA to buy your first home. Account holders can contribute up to $8,000 annually to the account, with room rolling forward if they don’t use it all during the calendar year, up to a lifetime maximum of $40,000. Partners who are saving for a first home together can each have an FHSA, with a combined total room of $80,000. As well, savers can combine the funds saved in the FHSA with those saved in the Home Buyers’ Plan when it comes time to purchase their home.

In order to access the First Home Savings Account, account holders must have entered into an agreement to purchase a home. Alternatively, the funds can be transferred into an RRSP at any time, without tax penalty. Overall, the account can be kept open for 15 years, or until you purchase your first home (it must be closed within the year of entering into an agreement of purchase and sale).

The First Home Savings Account is in effect as of April 1, 2023, though it is not yet widely available from Canada’s financial institutions. You can learn more about the First Home Savings Account on our blog, and by watching this helpful video below. 

RRSP Home Buyers' Plan

The first-time home buyer RRSP (Home Buyers' Plan) isn't a credit or rebate. Instead, the RRSP Home Buyers' Plan (HBP) allows first-time home buyers to use their tax-sheltered savings in a Registered Retirement Savings Plan (RRSP) for their down payment. As a first-time home buyer, the HBP lets you withdraw up to $35,000 for your down payment, which must be repaid into your RRSP within 15 years. There are some additional conditions to be aware of, and there's a risk you may cannibalize your long-term savings by using funds from your RRSP today - be sure to do your research before using this program.

First-Time Home Buyer Incentive 

Launched in September 2019, the First-Time Home Buyer Incentive is an interest-free loan for eligible first-time home buyers to help reduce their regular mortgage payments. This incentive contributes up to 10% of the total cost of your home, and you’ll need to pay back the loan within 25 years. By delaying the repayment of this loan, first-time home buyers can save a significant amount of money over the course of their mortgage. However, it is noteworthy that the First-Time Home Buyer Incentive has very stringent qualification guidelines that can make it difficult for people to access.

You can read in detail about the First-Time Home Buyer Incentive on our blog. 

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First time home buyer tax credits and rebates

First Time Home Buyers' Tax Credit

If you’re buying your first home, you may have access to a number of tax breaks. These include the First Time Home Buyers' Tax Credit which is claimed on your annual tax return in the year you buy a property. Until 2022, this rebate resulted in a $750 rebate, assuming you met the required conditions. When the 2022 budget was passed, the rebate amount for 2022 and subsequent taxation years was increased to $1,500. Another $750 tax credit is also available to residents of Quebec.

First-time home buyer land transfer tax rebate

In three provinces and one city, first-time home buyers can also claim a land transfer tax rebate. Land transfer taxes are charged by every province except for Saskatchewan and Alberta. An additional land transfer tax is charged by the city of Toronto. In British Columbia, Ontario, Prince Edward Island, and the city of Toronto, first-time home buyers are eligible for a rebate of these land transfer taxes, subject to certain maximums and conditions. Here are the maximum rebates for the four rebates:

  • City of Toronto: $4,475
  • Ontario: $4,000
  • British Columbia: $8,000
  • Prince Edward Island: $2,000

GST/HST new housing rebate

Every newly built home in Canada will have GST (goods and services tax) or HST (harmonized sales tax) levied on the price. The GST/HST new housing rebate is a rebate a portion of the federal component of this tax. Some provinces have their own version of this rebate, which reimburses buyers a portion of the provincial component.

This rebate can only be used on newly-built houses, the new construction of a home on land you own or for substantial renovations to an existing home. It's not exclusively available to first-time home buyers, but it's regularly used by first-time home buyers that are buying newly-built homes.


Quick links to provincial first-time home buyer education centres

While the programs described above are available to first-time home buyers throughout the country, it's also a good idea to check out what incentives and programs specific provinces are offering to first-time home buyers. You can learn more about them on our provincial first-time home buyer education centres below. 


More information for first-time home buyers

Below are some other general tips on how to buy a house as a first-time home buyer in Canada. Check the links in each section for more information on any of these topics.

Down payment

For first-time home buyers, the down payment is probably the main thing you'll need to think about for your first purchase. In Canada, you must put down a minimum of 5% as a down payment for homes less than $500,000. If the purchase price is between $500,000 and $1 million, you'll need 10% on the amount between $500,000 and $1 million. For houses over $1 million, the minimum down payment is 20%.

Mortgage default insurance

Mortgage default insurance, also sometimes known as CMHC Insurance (although CMHC is just one of three mortgage default insurance providers in Canada), may seem like a strange concept, but it’s relatively straightforward. If you have a down payment of less than 20% of the home’s value, you must purchase mortgage default insurance. But this doesn’t act as insurance for you. Rather, it protects your lender in case you don’t make your mortgage payments. It’s designed to make financial institutions comfortable with lending to individuals who don’t have a large down payment.

Mortgage insurance is calculated as a percentage of the value of the mortgage amount. If your down payment is between 5% to 9.99%, the mortgage insurance will represent 3.6% of the mortgage amount. For down payments of 10% to 14.99%, the mortgage insurance will cost 2.40%. And for down payments of 15% to 19.99%, mortgage insurance costs 1.80%.

Mortgage default insurance isn’t available for homes with a purchase price of more than $1 million. As a result, anyone buying a house in excess of this amount must have at least 20% as a down payment on their purchase.


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