Ontario Home Buyer Incentives (2026)

Updated: February 2026

Written by the Keith & Françoise Real Estate Team, Ontario Realtors® advising buyers across the Greater Toronto Area and Niagara Region.

Ontario home buyer incentives fall into three broad categories: savings programs that fund your down payment, tax credits that reduce what you owe, and rebates applied at closing. Each one has its own eligibility rules, timing requirements, and repayment obligations. Moreover, the interaction between programs matters as much as understanding each one individually.

This article goes beyond the basics. Specifically, it covers the mechanics, the calculations, and the situations where buyers assume they qualify and do not. For the full context of how incentives fit into the buying process, see our complete guide to buying a home in Ontario.

First Home Savings Account (FHSA)

The First Home Savings Account is the most powerful savings tool available to first-time buyers in Canada right now. It combines the tax deduction benefit of an RRSP with the tax-free withdrawal benefit of a TFSA, but only for qualifying first home purchases.

In practical terms, you can contribute up to $8,000 per year to a lifetime maximum of $40,000. Contributions also reduce your taxable income in the year you make them. When you withdraw the funds to purchase a qualifying first home, the withdrawal is completely tax-free. There is no repayment requirement, which is the key difference from the Home Buyers’ Plan.

FHSA carry-forward: the one-year rule for unused contribution room

If you do not contribute the full $8,000 in a given year, up to $8,000 of unused room carries forward to the following year. For example, a buyer who opened an FHSA in 2023 and contributed nothing could contribute up to $16,000 in 2024. That covers $8,000 for 2024 plus $8,000 carried forward from 2023. The carry-forward only applies to one prior year at a time, so room does not accumulate indefinitely.

Never buying a home: your FHSA options

That said, the FHSA expires 15 years from the year you opened it. If you have not used the funds within 15 years, or you turn 71, you must close the account. Funds transfer to an RRSP or RRIF tax-free, so you do not lose the money. You do, however, lose the tax-free withdrawal benefit that makes the FHSA most powerful for home purchases.

The one-year rule buyers often miss

To make a qualifying withdrawal from your FHSA, the account must have been open for at least one calendar year before the withdrawal. For instance, opening an FHSA in November and withdrawing in March of the following year does not satisfy the one-year rule. Two calendar years may have passed, but the account has not been open for one full year. Instead, the account needs to have existed for a minimum of one full calendar year. Planning to purchase within 12 to 18 months? Open the FHSA now. Ultimately, the contribution amount matters less than starting the clock.

For CRA eligibility requirements and contribution rules, see the CRA First Home Savings Account page.

RRSP Home Buyers’ Plan (HBP)

The Home Buyers’ Plan lets eligible buyers withdraw up to $60,000 from their RRSP for a qualifying first home purchase. Importantly, you trigger no immediate tax. The funds must be in the RRSP for at least 90 days before they can be withdrawn under the HBP.

Unlike the FHSA, HBP withdrawals must be repaid. You have 15 years to repay the full amount back into your RRSP, starting two years after the year of withdrawal. Specifically, the minimum annual repayment is 1/15th of the total amount withdrawn. If you miss a repayment in a given year, that amount gets added to your taxable income.

Missed HBP repayments: the tax consequence

Importantly, missing a repayment does not eliminate your obligation. Instead, the CRA treats the missed amount as RRSP income that year. As a result, it gets added to your taxable income on that year’s tax return. Consequently, you will pay tax on it at your marginal rate. Meanwhile, the remaining repayment schedule continues for the years that follow. Buyers who use the HBP should factor the annual repayment into their post-purchase budget before they withdraw, not after.

The 90-day rule

Funds must be in your RRSP for at least 90 days before they can be withdrawn under the HBP. Contributing $30,000 to an RRSP in January and withdrawing in March under the HBP does not satisfy the 90-day rule. The clock has not yet run. Therefore, plan contributions well in advance of your anticipated purchase timeline. For current program rules, see the CRA Home Buyers’ Plan page.

Stacking the FHSA and HBP together

Notably, eligible buyers can use both the FHSA and the HBP for the same purchase. Most first-time buyers in Ontario underuse this strategy, even though it can significantly increase their available down payment.

Here is what that looks like in practice. A buyer who has $40,000 in an FHSA and $60,000 in RRSP savings can withdraw both for a total of $100,000 toward their down payment. First, you withdraw FHSA funds completely tax-free with no repayment obligation. Second, the HBP withdrawal must be repaid over 15 years. Furthermore, both partners qualifying can combine up to $80,000 from two FHSAs with up to $120,000 from two RRSPs under the HBP. Together these programs can contribute up to $200,000 in down payment funds for a qualifying couple.

The practical constraint is that most buyers do not have $40,000 in an FHSA unless they have been contributing for several years. This is why opening the account early matters so much, even with small initial contributions.

Home Buyers’ Amount tax credit

In addition, the Home Buyers’ Amount is a federal non-refundable tax credit worth $10,000. Simply claim it on your personal tax return in the year you purchase a qualifying home. At the current federal tax rate of 15%, a $10,000 claim translates to up to $1,500 in federal tax relief.

Non-refundable means it reduces the tax you owe but does not generate a refund if the credit exceeds your tax payable. A buyer with $800 in federal tax owing who claims the full $1,500 credit reduces their tax to zero. The remaining $700 does not come back.

Claim the credit on line 31270 of your federal tax return. Both partners in a couple purchasing together can split the claim as long as the combined total does not exceed $10,000. You do not need to notify anyone at closing. You simply claim it when you file your return for the year of purchase.

Ontario land transfer tax refund

Ontario also offers a land transfer tax refund of up to $4,000 for eligible first-time buyers. On most purchases under approximately $368,000, this eliminates the provincial land transfer tax entirely. On higher-priced purchases, it offsets a portion of the tax owed.

Ontario LTT calculation: real numbers on real purchases

Ontario calculates land transfer tax on a tiered scale. On a $700,000 purchase the provincial LTT is approximately $9,475. The first-time buyer refund of up to $4,000 reduces that to approximately $5,475. On a $500,000 purchase the LTT comes to approximately $6,475, dropping to approximately $2,475 after the first-time buyer refund. Your lawyer then calculates and applies the refund at closing, provided you meet the eligibility requirements.

Your lawyer applies the refund automatically at closing once you declare your eligibility. Importantly, you do not need to file a separate application after the fact. For current rates and thresholds, see the Ontario land transfer tax refund page.

Toronto municipal land transfer tax rebate

In addition, buyers purchasing within the City of Toronto pay a second land transfer tax on top of the provincial one. Eligible first-time buyers can receive a municipal land transfer tax rebate of up to $4,475.

Toronto MLTT rebate: combined savings for first-time buyers

Toronto calculates the MLTT on the same tiered structure as the provincial tax. On a $700,000 purchase, the Toronto MLTT is approximately $9,475. The first-time buyer rebate of up to $4,475 reduces that to approximately $5,000. Combined with the provincial refund, a first-time buyer purchasing a $700,000 property in Toronto receives up to $8,475 in land transfer tax relief between both programs.

Your lawyer applies the Toronto rebate at closing alongside the provincial refund. Conveniently, your lawyer handles both at the same time as part of the closing statement. For current rates and eligibility, see the City of Toronto MLTT rebate page.

GST/HST new housing rebate

HST applies when you purchase a newly built home or substantially renovated property. In Ontario the combined HST rate is 13%: 5% federal GST plus 8% provincial. On a $700,000 new build, that is $91,000 in HST before any rebate.

The federal GST/HST New Housing Rebate offsets part of this cost for homes under $450,000. A reduced benefit phases out above that threshold. The Ontario component of the rebate applies separately and covers a portion of the provincial component. For homes priced above the federal threshold, only the Ontario rebate may apply.

In most new build transactions, however, builders incorporate the rebate into the purchase price and assign it to themselves. As a result, buyers receive the benefit through a lower net price. Your Agreement of Purchase and Sale specifies how HST and the rebate work. Read this carefully before signing, and confirm the treatment with your lawyer. For full rebate details, see the CRA GST/HST new housing rebate page.

Eligibility traps buyers walk into

Most first-time buyer incentives in Ontario, however, have eligibility rules that are stricter than buyers expect. Specifically, these are the situations we see most often where buyers assume they qualify and do not.

Spousal or partner ownership history

For the Ontario land transfer tax refund, neither you nor your spouse or common-law partner can have previously owned a home anywhere in the world. If your partner owned a property in another country ten years ago, neither of you qualifies for the provincial refund, regardless of your personal ownership history. The same restriction applies to the Toronto municipal rebate.

For the FHSA and HBP, however, the rules are somewhat more forgiving. Both programs use a four-year lookback rule. You must not have lived in a home owned by you or your partner at any point in the current year or the four preceding calendar years. A buyer who owned and sold a home and has rented for more than four years may re-qualify for federal programs. They may still, however, be ineligible for the provincial and Toronto LTT refunds.

Foreign property ownership

The Ontario LTT refund requires that you have never owned a home anywhere in the world, not just in Ontario or Canada. Owning property in another country at any point disqualifies a buyer from the provincial refund. Notably, this rule applies regardless of prior Ontario ownership history. Consequently, this catches a number of buyers who immigrated to Canada and owned property in their home country before arriving.

We have seen this situation play out firsthand. A client came to us confident they qualified as a first-time buyer. The issue only came up when the conversation turned to closing costs and they mentioned a property they had owned years earlier in another country. They had not considered it relevant since they had never owned in Canada. It was relevant. That prior ownership disqualified them from the Ontario land transfer tax refund entirely. As a result, their closing cost calculation changed at a point in the process when it was too late to plan around it. Confirming your full ownership history with your lawyer before you write an offer is the only way to avoid that kind of surprise.

Buying with a non-first-time buyer

Buying jointly with someone who does not qualify as a first-time buyer reduces the rebates proportionally. A couple where one partner qualifies and one does not will receive 50% of the available rebates, not the full amount. In that case, your lawyer will calculate the eligible portion based on ownership percentage.

Programs that are no longer available

The CMHC First-Time Home Buyer Incentive is no longer accepting new applications. Under the program, the federal government took a stake in your property in exchange for a down payment top-up. The federal government officially wound it down. Do not factor it into any purchase planning. Therefore, buyers who had counted on this program need to find alternative down payment strategies. CMHC has confirmed this on their website at cmhc-schl.gc.ca.

Timing: when to act on each program

The order in which you engage these programs, therefore, matters more than most buyers realise. Here is how to think about sequencing.

Open your FHSA as soon as you know you intend to buy within the next few years. The one-year rule means the account must exist before you can withdraw. Open it as early as possible, even with a small initial contribution, since the contribution room accrues from the year you open the account.

Check your RRSP balance and confirm contribution timing before counting on the HBP. Specifically, the 90-day rule catches buyers who contribute funds close to their purchase timeline. Therefore, plan any top-up contributions at least 90 days before you expect to need the withdrawal.

Your lawyer handles the land transfer tax refunds at closing. You claim the Home Buyers’ Amount at tax filing. You claim the Home Buyers’ Amount when you file your return for the year of purchase. Neither, however, requires advance action beyond confirming eligibility before you write an offer.

For how these programs interact with your mortgage financing, see our guide to mortgage financing for Ontario buyers. For the complete first-time buyer picture including down payment requirements and offer conditions, see our First-Time Home Buyer Guide Ontario. If you have owned before and want to understand which programs you may still qualify for, see our guide to Ontario home buyer programs for returning buyers.

Ontario Home Buyer Incentive Questions Answered

Program rules, eligibility thresholds, and contribution limits can change. This article reflects program details as of February 2026. Confirm current eligibility requirements and limits directly with the CRA, your real estate lawyer, or a qualified financial advisor before making decisions based on any incentive program.

Market conditions, pricing strategies, and buyer competition vary by location, property type, and timing. This guide reflects our experience working with buyers and sellers across Ontario, particularly in the GTA and Niagara Region. For advice specific to your situation, speak with a qualified real estate professional before making decisions.