First-Time Home Buyer Plan in Ontario: A Month-by-Month Legal Checklist

Buying a first home involves a lot of moving parts, and several of them have deadlines that start well before you make an offer. Opening the right accounts early, knowing what a lender will and will not promise, and understanding the tax relief available can save you money and stress.

This checklist spreads the main legal and financial tasks over roughly twelve months. Your timeline may be shorter or longer, and the right order depends on your finances, so treat it as a framework and confirm the details that matter to you with a lawyer, accountant or your lender.

Step one: confirm whether you count as a first-time buyer

There is no single definition. Each program uses its own test, and you can pass one and fail another. Spouses and common-law partners often matter, so check your partner's history as well as your own.

Early months: open accounts and start saving

To open an FHSA you must be a Canadian resident, at least 18 (19 in some provinces and territories), no older than 71 at December 31 of the year you open it, and a first-time home buyer. You open it with an issuer such as a bank, credit union, or trust or insurance company, and you give them your SIN and date of birth. If that information is wrong, the registration may be revoked back to the opening date.

Know the limits before you contribute. The annual limit is $8,000 and the lifetime limit is $40,000, and both apply across all your FHSAs combined. Unused room carries forward up to $8,000, so the most you can put in during one year is $16,000, but carrying forward does not raise the lifetime limit. Overcontributing triggers a tax of 1% per month on the highest excess amount in that month.

• Open your FHSA early so you start building contribution room and savings.
• Contributions are generally deductible, but transfers from an RRSP to an FHSA are not deductible.
• Qualifying withdrawals to buy or build a home are non-taxable.
• Keep your own record of contributions across every account so you do not exceed the limits.

Middle months: plan your down payment and get pre-approved

CMHC says the minimum down payment is 5% of the first $500,000 of the price plus 10% of the portion above $500,000. It also says gifts from immediate family and RRSP withdrawals are acceptable sources of down payment. Lender requirements on gifts vary, so ask your lender what paperwork they want before the money moves.

If you plan to use the Home Buyers' Plan, the withdrawal limit is currently $60,000 per person. You must be a Canadian resident and have a written agreement to buy or build a qualifying home when you withdraw, and a pre-approved mortgage does not count. The money must come from RRSPs where you are the annuitant, and locked-in and group RRSPs generally do not qualify. Contributions you make in the 89 days before an HBP withdrawal can lose their deductibility to the extent they exceed the RRSP's value after the withdrawal.

You can use an HBP withdrawal and a qualifying FHSA withdrawal for the same home if you meet every condition at the time of each withdrawal. The difference matters later: HBP withdrawals are repayable, while qualifying FHSA withdrawals are non-taxable and not repayable.

A pre-approval is an estimate of the maximum mortgage and likely rate after a credit check and a review of your income, debts and assets. It does not guarantee approval, and the lender can hold the rate for roughly 60 to 130 days depending on the lender.

Months 5 to 2: house hunt, make an offer and line up your lawyer

Even with a pre-approval, you must get final lender approval during the conditional offer period. The lender checks that the property meets its standards, and the final amount depends on the property's value and your down payment. A lender may offer a smaller mortgage, a higher rate, a larger down payment requirement or a co-signer.

Offers commonly list the names, price, inclusions, deposit, possession date, expiry date and conditions such as inspection and financing. If you are buying a condo, CMHC advises making a satisfactory status (estoppel) certificate a condition of the offer. Have a real estate lawyer review the agreement before you sign, not after.

If you want title insurance, know that it is not required in Ontario and does not replace legal advice. It can cover title defects, liens, encroachments, survey and public-record errors and title fraud, but common exclusions include known defects and issues only a new survey would reveal. Where a client chooses title insurance, the lawyer should explain the searches the lawyer will not perform, such as zoning, encroachments and survey issues, and what they would reveal.

The closing month and the first year after

For a qualifying FHSA withdrawal you complete Form RC725 and give it to your FHSA issuer. You need a written agreement to buy or build a qualifying home, an intention to occupy it as your principal residence within one year, and first-time buyer status. The home must be acquired or completed before October 1 of the year after the withdrawal.

A statement of adjustments credits the seller with the price and you with your deposits. Property taxes are adjusted annually and condo fees monthly. The buyer's lawyer also sends a requisition letter, and you sign a direction on how to take title and an undertaking to readjust.

Ontario's first-time homebuyer land transfer tax refund is up to $4,000, and no tax is payable on the first $368,000 of value for eligible homes. You must be at least 18, occupy the home as your principal residence within nine months of the transfer, and be a Canadian citizen or permanent resident for agreements after November 14, 2016. On electronic registration it is claimed at closing through the Explanation tab of the land transfer tax section. If it is missed, you pay the tax on registration and apply to the Ministry of Finance within 18 months after registration, with no interest paid.

If you used the HBP, repayment runs over 15 years. It normally starts in the second year after the withdrawal, but for first withdrawals from January 1, 2026 to December 31, 2028 the start is deferred to the fifth year after the year of the first withdrawal. Confirm the current start year with CRA or your accountant. If you repay less than the minimum, the shortfall is added to your income.

What to do next

• Check first-time buyer status for yourself and your partner under each program.
• Open an FHSA and track your annual and lifetime room.
• Decide whether to use the Home Buyers' Plan and note the repayment rules.
• Get a pre-approval and ask the lender about gift and down payment paperwork.
• Book a real estate lawyer before you make your first offer.
• Ask your lawyer about conditions, title insurance and the land transfer tax refund at closing.
• Diarize your HBP repayment start year and your 18-month refund deadline if needed.

Frequently asked questions