Ontario Home Buyer Incentives (2026)

Updated: March 2026

By the Keith & Françoise Real Estate Team, Ontario Realtors® with eXp Realty Brokerage. We advise buyers across the Greater Toronto Area and Niagara Region on incentive eligibility, financing strategy, and offer preparation.

Ontario home buyer incentives fall into three categories: tax-advantaged savings programs that help fund a down payment, tax credits claimed after purchase, and rebates applied at closing or through tax filings. This article covers each one in practical terms, including what buyers most commonly get wrong about eligibility.

For the full buying process and how incentives fit into financing and closing, see our complete guide on buying a home in Ontario. For a full breakdown of mortgage financing, see mortgage financing simplified for Ontario buyers.

First Home Savings Account (FHSA)

The FHSA 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.

You can contribute up to $8,000 per year to a lifetime maximum of $40,000. Contributions 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 with no repayment requirement. That last point is the key difference from the Home Buyers’ Plan.

The FHSA is most effective when opened early and used as part of a multi-year savings strategy. Buyers who open one shortly before purchasing may still benefit from the tax deduction, but the compounding advantage comes from years of tax-free growth. Opening it as soon as you are eligible, even if a purchase is a few years away, is almost always the right call.

RRSP Home Buyers’ Plan (HBP)

The Home Buyers’ Plan allows eligible buyers to withdraw up to $60,000 from their RRSP toward a qualifying first home purchase. Couples who both qualify can each withdraw up to $60,000, for a combined total of $120,000 available toward the down payment.

Unlike the FHSA, you must repay HBP withdrawals to your RRSP over 15 years. If you miss a year’s repayment, CRA adds that amount back to your taxable income for that year. Your funds must also sit in your RRSP for at least 90 days before withdrawal. Contributing $30,000 to an RRSP in January and withdrawing it in March under the HBP does not satisfy the 90-day rule.

Can you use both the FHSA and the HBP for the same purchase?

Yes. Eligible buyers can use both programs together for the same purchase. A buyer with $40,000 in an FHSA and $60,000 in eligible RRSP savings can access up to $100,000 toward their down payment. The FHSA withdrawal carries no repayment obligation and comes out completely tax-free. The buyer must repay the HBP withdrawal over 15 years. This is one of the most underused strategies among Ontario first-time buyers and worth understanding before you start saving.

Ontario Land Transfer Tax Refund for First-Time Buyers

Ontario offers a land transfer tax refund of up to $4,000 for eligible first-time homebuyers. On most homes priced below $368,000, this eliminates the provincial land transfer tax entirely. On higher-priced homes, it offsets a portion of the cost. Your lawyer applies the refund at closing, provided eligibility requirements are met.

To qualify, you must never have owned a home anywhere in the world. If your spouse or common-law partner has previously owned a home anywhere in the world, neither of you qualifies for this refund. This rule catches many buyers off guard, particularly those purchasing with a partner who owned property in another country before coming to Canada.

Toronto Municipal Land Transfer Tax Rebate

Buyers purchasing within the City of Toronto pay a second land transfer tax on top of the provincial amount. Eligible first-time buyers may qualify for a municipal rebate of up to $4,475 on that second tax. Your lawyer applies both the provincial and municipal rebates at closing at the same time.

Combined, a first-time buyer purchasing a home in Toronto can receive up to $8,475 in land transfer tax relief between the two programs. On a $700,000 purchase in Toronto, that is a meaningful saving that belongs in your closing cost planning from the start.

First-Time Home Buyers’ Tax Credit (HBTC)

The Home Buyers’ Amount is a federal non-refundable tax credit worth $10,000. At the current federal tax rate of 15%, a $10,000 claim translates to up to $1,500 in federal tax relief. You claim it on your personal income tax return in the year you purchase. Both partners in a couple purchasing together can split the claim as long as the combined total does not exceed $10,000.

This is not a cash payment at closing. It reduces the income tax you owe when you file. Non-refundable means it reduces your tax to zero but does not generate a refund if the credit exceeds your tax payable.

GST/HST New Housing Rebate

HST does not apply to resale homes. It applies to newly built homes and substantially renovated properties. On a newly built home 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 GST/HST New Housing Rebate offsets a portion of that cost for qualifying purchases. The federal portion of the rebate applies in full on homes under $450,000 and phases out above that threshold. The Ontario component is separate. How you use the property and how you structure the purchase both affect your eligibility. Confirm the rebate calculation with your lawyer and builder before closing.

Programs That Are No Longer Available

CMHC discontinued the Canada First-Time Home Buyer Incentive shared-equity program in March 2024 and no longer accepts applications. Do not include this program in your planning. Any resource that still lists it as available is out of date.

How Incentives Affect Your Offer and Closing

Most incentives do not change your contractual obligations in an Ontario purchase. Deposits, closing funds, and financing conditions must still be met on time. Incentives are planning tools. They reduce costs or improve cash flow, but they are not substitutes for having the right funds available on closing day.

Incentive issues rarely come from missing a program. They come from timing and eligibility assumptions. Buyers who learn about FHSA contribution rules or LTT rebate eligibility after an offer is accepted have very little room to act. Understanding your eligibility before you start searching lets you structure your savings and closing funds accurately from the start.

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