First-Time Home Buyer Tax Credits Available in Ontario

Buying a first home involves several tax benefits, and they are not one program. Some are claimed on your tax return, some at the land registry, and some through the builder or the CRA.

This article outlines the main federal and Ontario benefits, who qualifies for each, and how each is claimed. Amounts and dates change, so confirm the current details before you rely on them.

The main benefits at a glance

The two HST rebates apply to new or substantially renovated homes, not resale homes.

The federal Home Buyers' Amount

The Home Buyers' Amount lets you claim up to $10,000 for the purchase of a qualifying home in 2025, and it is a non-refundable credit. You must not have lived in another home owned by you or your spouse or common-law partner in the year of purchase or any of the four preceding years.

The home must be registered in your name or your spouse's or common-law partner's name, be located in Canada, and you must intend to live in it as your principal residence no later than one year after buying it.

• You do not have to be a first-time buyer if you are eligible for the disability tax credit, or if you buy the home for a related person who is eligible and the home is more accessible or better suited to their needs.
• Spouses or common-law partners can split the amount only if both are eligible, and their combined claims cannot exceed the yearly maximum.

Check the amount for the year you buy, because it is set by tax year.

Savings and withdrawal plans: FHSA and HBP

The First Home Savings Account allows $8,000 a year of participation room, with unused room carried forward up to $8,000, and a lifetime limit of $40,000. Qualifying withdrawals to buy or build a qualifying home are not taxable. To open one you must be 18 or older, a resident of Canada and a first-time home buyer.

A qualifying withdrawal needs a written agreement to buy or build a qualifying home before October 1 of the year after the withdrawal. You must not have acquired the home more than 30 days before the withdrawal, and you must give Form RC725 to the issuer.

The Home Buyers' Plan lets you withdraw up to $60,000 from RRSPs, repaid over up to 15 years, and you can also make a qualifying FHSA withdrawal for the same home if you meet all conditions at each withdrawal. Confirm the current repayment timing before you withdraw.

Ontario land transfer tax refund

Ontario refunds land transfer tax to first-time homebuyers up to a maximum of $4,000. The buyer must be at least 18, must never have owned a home or an interest in one anywhere in the world, and must live in the home as their principal residence within nine months of the transfer.

The refund is usually claimed at registration in the land transfer tax affidavit. If it is not claimed then, you must apply to the Ministry of Finance within 18 months after the date the conveyance was registered.

Two catches matter. A spouse's past home ownership can disqualify a buyer, and for agreements signed after November 14, 2016, buyers must be Canadian citizens or permanent residents. If you are buying in Toronto, the city's municipal land transfer tax has its own rebate, which is separate and worth asking about.

HST rebates on new homes

The federal rebate is a full rebate of the GST or federal part of the HST on a new or substantially renovated home valued up to $1 million, reduced for homes between $1 million and $1.5 million, and nil at $1.5 million or more. For example, a $1.25 million home gets $25,000.

You must be at least 18 and a Canadian citizen or permanent resident, must not have lived in a home owned by you or your spouse or common-law partner in the calendar year or the previous four calendar years, and neither of you can have received the rebate before. For a home bought from a builder, the agreement must be signed on or after March 20, 2025 and before 2031, and the home must be substantially completed before 2036.

Ontario's rebate gives back up to $80,000 of the provincial part of the HST and follows the federal eligibility conditions. The rules for these rebates have been changing, so confirm their current status before you sign a purchase agreement.

What to do next

• Write down every home you or your spouse have owned or lived in, and when.
• Check each program's definition of first-time buyer, since they differ.
• Ask your lawyer to claim the Ontario refund in the land transfer tax affidavit.
• If buying new, ask the builder how the HST rebates are handled.
• Keep your agreement of purchase and sale, and FHSA and HBP paperwork, for your tax return.

Frequently asked questions