First-Time Home Buyer Incentives in Ontario (Jan 2026)

One of the biggest myths I hear all the time is: “You need a massive down payment to buy your first home.”
That’s simply not true.

There are several federal and provincial programs that can save first-time buyers tens of thousands of dollars — but most people don’t fully understand how they work, or whether they actually qualify.

In this video, I’ll walk you through every major incentive, explain who’s eligible, and — most importantly — show you how these programs work in real life, not just on paper.

I work with first-time buyers across Toronto, Vaughan, Richmond Hill, and Markham, and I see the same confusion come up again and again. My goal today is to clear that up so you can move forward with confidence.

Section 1: Who Is Considered a First-Time Home Buyer?

Before we talk about any incentives, we need to clear this up first — because this is where most confusion starts.

When people hear “first-time home buyer,” they assume it means someone who’s never owned a home in their life. That’s not always the case.

In Canada, you’re generally considered a first-time buyer if one of these applies:

You’ve never owned a home before — straightforward.
You have owned a home in the past, but haven’t lived in a home you owned within the last four years. This is common for people who rented for years after selling a property.
If you’ve recently separated or divorced, you may still qualify as a first-time buyer again, even if your name was on a property before.

Key takeaway: First-time buyer status is not always a “once-in-a-lifetime” thing. Depending on your situation, you may qualify more than once — and that opens the door to incentives you might not have thought were available.

Section 2: Home Buyers’ Plan (HBP – RRSP)

Now let’s talk about the Home Buyers’ Plan, or HBP for short — one of the most powerful tools first-time buyers can use.

The HBP allows you to withdraw up to $60,000 from your RRSP to help with your down payment — tax-free at the time of withdrawal. If you’re buying with a spouse or partner who also qualifies, you can each withdraw $60,000 for a total of up to $120,000.

Think of it as an interest-free loan to yourself. No interest, no tax — but there’s a repayment requirement: you must repay the withdrawn amount over a maximum of 15 years, with at least 1/15th repaid each year.

A few key points:

Money must be in your RRSP for at least 90 days before withdrawal.
Must be used for a qualifying home in Canada that will be your principal residence.
Missing a repayment means that portion is added to your taxable income.

The HBP makes sense if you:

Already have a strong RRSP balance.
Have stable income to meet repayment obligations.
Are comfortable managing annual repayments over the long term.

It’s a great way to boost your down payment without waiting years to save more — as long as you plan carefully.

Section 3: First Home Savings Account (FHSA)

Next is the First Home Savings Account, or FHSA — and this is one of the most important tools for buyers planning 2–5 years ahead.

The FHSA allows up to $40,000 in total contributions. Contributions are tax-deductible, like an RRSP, and withdrawals for your first home are tax-free, like a TFSA.

Basically, it combines the best of RRSP and TFSA: tax relief when saving, and no tax when you withdraw to buy.

The FHSA is ideal if:

You’re not buying immediately but have a plan to buy in the next few years.
You want to reduce taxes while building a down payment.
You’re disciplined and want your savings to grow efficiently.

Opening an FHSA early is often smarter than waiting — even if your purchase is a few years away — because you’re starting to accumulate contribution room and tax benefits right away.

Section 4: Ontario Land Transfer Tax Rebate

Let’s get practical with Ontario-specific incentives, starting with the Land Transfer Tax rebate.

When you buy a home in Ontario, land transfer tax is due at closing. First-time buyers can save up to $4,000 provincially.

If you’re buying in Toronto, there’s an additional municipal rebate up to $4,475, bringing your total potential rebate to almost $8,500.

Important notes:

Applies only to first-time buyers.
Must occupy the property as your principal residence.

Example: Buying a condo in Toronto for $800,000? Land transfer tax would normally be over $24,000. With provincial and Toronto rebates, you could save nearly $8,500 at closing. That’s money back in your pocket.

Section 5: New Construction HST Rebate

Next is the New Construction HST Rebate.

When buying a brand-new or pre-construction home, there may be an HST rebate. Often, it’s built into the builder’s price, so buyers don’t always see it.

Key points:

Applies only if the home is your principal residence.
Not every buyer qualifies for the full rebate — it depends on purchase price, contract structure, and intended use.
Professional guidance is critical here, especially for pre-construction deals. Misunderstanding the rules can cost thousands at closing.

Section 6: What Incentives Do NOT Do (Reality Check)

Before we wrap up, a reality check:

Incentives do not magically make homes cheap.
They do not replace good credit or financial planning.
They do not fix over-stretching yourself financially.

Incentives help smart planning — they don’t save bad decisions.

Section 7: Common First-Time Buyer Mistakes with Incentives

Here are some mistakes I see often:

Using RRSP withdrawals without a clear repayment plan.
Taking shared equity incentives without understanding appreciation.
Ignoring closing costs, assuming incentives cover everything.
Thinking incentives = affordability — they help, but they don’t replace budgeting.

Section 8: How Incentives Should Be Used Strategically

Incentives should fit your timeline and financial situation.

Every buyer’s mix is different — some should use several, others none.
The goal is not to use every incentive; it’s to use the right ones, at the right time, for the right reasons.
That’s where professional guidance makes a real difference.

Closing + Soft Call to Action

If there’s one takeaway: plan before you shop.

Don’t let incentives rush your decision — use them to make a better decision.

Getting educated first gives you options, confidence, and control — and that’s what first-time buyers really need.

If you’re thinking about buying your first home and want to understand which incentives actually make sense for you, take the time to get informed before jumping in. That preparation alone can save you a lot of stress — and a lot of money.