8 First-Time Home Buyer Incentives in Ontario (2026): How to Save Money When Buying Your First Home

By Charlotte Ferguson | Mortgage Agent Level 2 | Mortgages by Charlotte

*Updated October 2026*

Buying your first home in Ontario is exciting. It’s also one of the biggest financial decisions you’ll ever make.

Between saving for a down payment, qualifying for a mortgage, calculating closing costs and understanding interest rates, there’s a lot to navigate.

But here’s something many first-time buyers don’t realize:

There are programs available that could help you save, reduce certain costs and make homeownership more achievable.

Some offer tax advantages. Others provide rebates, allow you to use existing savings or give you more flexibility with your mortgage payments.

Whether you’re buying your first home in Kitchener, Waterloo, Cambridge, Guelph, Elmira or elsewhere in Ontario, understanding these opportunities before you purchase could make a meaningful difference.

Let’s explore eight first-time home buyer incentives and financing options available in Ontario in 2026, and more importantly, how to use them.

1. First Home Savings Account (FHSA): Save Up to $40,000 With Tax Advantages

If you’re planning to buy your first home, the First Home Savings Account (FHSA) is one of the most valuable savings tools to investigate.

It combines two features that make it particularly attractive:

– Eligible contributions are tax-deductible.
– Qualifying withdrawals, including investment growth, are tax-free.

How much can you contribute?

You generally receive $8,000 of participation room when you open your first FHSA, with a lifetime contribution limit of $40,000. Unused annual room may be carried forward, subject to program limits.

How to use an FHSA

Imagine you’re planning to buy a home in three years.

You open an FHSA today and begin contributing regularly toward your down payment.

Your eligible contributions can help reduce your taxable income, while the funds inside the account can grow tax-free.

When you’re ready to buy, you may withdraw the money tax-free if you meet the qualifying withdrawal requirements.

And unlike the RRSP Home Buyers’ Plan, you don’t have to repay a qualifying FHSA withdrawal.

Charlotte’s Tip: Don’t wait until you’re ready to start shopping for a home. FHSA participation room only begins accumulating after you open your first account.

Learn more about the FHSA through the Canada Revenue Agency.

 2. Home Buyers’ Plan (HBP): Use Up to $60,000 From Your RRSP

Already contributing to a Registered Retirement Savings Plan (RRSP)?

Your retirement savings might also help you purchase your first home.

The federal Home Buyers’ Plan allows eligible homebuyers to withdraw up to **$60,000 from their RRSP** without the withdrawal being immediately taxable, provided they meet the program requirements.

If you’re purchasing with a partner and you both qualify, you could potentially access up to $120,000 combined.

How to use the Home Buyers’ Plan

Before making a withdrawal, confirm your eligibility and review your RRSP funds.

You can then arrange a qualifying withdrawal through your financial institution using the appropriate Canada Revenue Agency documentation.

The funds can help cover your down payment or other eligible purchase expenses.

There is one important consideration: **HBP withdrawals must generally be repaid over 15 years.**

For individuals making their first HBP withdrawal in 2026, temporary repayment relief delays the start of required repayments until 2031.

Can you use the FHSA and Home Buyers’ Plan together?

Yes!

If you qualify for both programs, you can combine an FHSA qualifying withdrawal with an RRSP Home Buyers’ Plan withdrawal toward the same home.

That means an individual who has accumulated $40,000 in an FHSA and has $60,000 available in an RRSP could potentially access $100,000 toward their purchase.

These are your own accumulated savings, not a $100,000 government grant, and different tax and repayment rules apply.

Charlotte’s Tip: Just because you *can* withdraw from your RRSP doesn’t always mean you *should*. Consider the long-term impact on your retirement savings when deciding how much to use.

Read the CRA’s official Home Buyers’ Plan guide.

3. Ontario Land Transfer Tax Refund: Save Up to $4,000

When buying property in Ontario, land transfer tax is one of the closing costs you need to plan for.

Fortunately, eligible first-time buyers may qualify for a provincial refund of up to **$4,000**.

This incentive can apply to qualifying resale homes and newly constructed properties.

How to claim the refund

Your real estate lawyer can generally apply the refund when registering your purchase.

Instead of paying the full provincial land transfer tax and waiting to receive the refund afterward, the qualifying amount can usually be credited at closing.

The benefit depends on your eligibility and the actual land transfer tax payable.

Ontario’s first-time buyer rules are specific. You generally must be at least 18, must not have owned an eligible home anywhere in the world previously, and must occupy the property as your principal residence within nine months.

Additional rules can apply to spouses, co-purchasers and residency status.

Charlotte’s Tip: Always have your lawyer calculate your anticipated land transfer tax before closing. Surprises are lovely on birthdays, but considerably less enjoyable when signing mortgage documents.

Review Ontario’s first-time homebuyer land transfer tax refund rules.

4. Federal Home Buyers’ Tax Credit: Up to $1,400 in 2026

Here’s another benefit that can be overlooked after the excitement of moving day.

The federal Home Buyers’ Amount, commonly called the First-Time Home Buyers’ Tax Credit, allows eligible purchasers to claim up to $10,000 on their income tax return.

For the 2026 tax year, the federal non-refundable tax credit can be worth up to **$1,400 in tax relief**, based on the 14% lowest federal tax rate.

How to claim the credit

When filing your income tax return for the year you purchased your qualifying home, claim the Home Buyers’ Amount on line 31270.

You should retain documentation confirming your purchase and eligibility.

Because this is a non-refundable tax credit, it reduces the federal income tax you owe. It doesn’t automatically create a cash refund if you have no federal tax owing.

Charlotte’s Tip: Keep a folder with your purchase agreement, statement of adjustments, mortgage documents and legal closing paperwork. It’ll make tax time much easier.

See the CRA’s Home Buyers’ Amount instructions.

5. Federal First-Time Home Buyers’ GST/HST Rebate: Up to $50,000

Considering a newly constructed home?

This newer federal incentive is particularly important to understand.

Eligible first-time buyers can receive a rebate covering the federal GST portion, or federal portion of HST, on qualifying newly built or substantially renovated homes.

For homes priced up to $1 million, the applicable federal tax can be fully rebated, up to a maximum of **$50,000**.

The rebate decreases for homes valued between $1 million and $1.5 million and is unavailable under this program for homes valued at or above $1.5 million.

How to access the federal rebate

Before signing a new-construction purchase agreement:

1. Confirm the home and purchasers qualify.
2. Ask whether the advertised purchase price includes the rebate.
3. Review the builder’s rebate provisions with your lawyer.
4. Confirm who will submit the rebate application.

Depending on the transaction, the builder may credit the rebate to you, or you may need to apply directly through the CRA.

For builder purchases, the qualifying agreement generally must have been entered into on or after March 20, 2025, and before 2031. Other construction, ownership and occupancy deadlines apply.

This incentive generally does not apply to ordinary resale homes.

Charlotte’s Tip: Always ask whether a new home’s price includes HST and which rebates have already been deducted. Otherwise, you could mistakenly count the same benefit twice.

Explore the federal First-Time Home Buyers’ GST/HST Rebate.

6. Ontario First-Time Home Buyers’ HST Rebate: Up to $80,000

Ontario first-time buyers purchasing an eligible new home may also benefit from relief on the provincial portion of HST.

For qualifying homes valued up to $1 million, the Ontario first-time buyer rebate, together with the applicable provincial new housing rebate, can provide relief covering the full 8% provincial portion, up to **$80,000**.

For homes between $1 million and $1.5 million, the standard first-time buyer provincial relief is generally reduced.

An important additional opportunity for 2026

Ontario also introduced a temporary Enhanced New Housing Rebate.

For qualifying builder purchases with agreements generally signed between April 1, 2026, and March 31, 2027, this program may provide provincial HST relief of up to $80,000, including eligible purchases by people who aren’t first-time buyers.

Its price thresholds differ from those of the standard first-time buyer rebate.

These provincial rebates overlap. They are not separate $80,000 payments that can simply be added together.

For an eligible first-time buyer purchasing a qualifying $1 million newly built home, the combined federal and provincial tax relief could reach **$130,000**, subject to the applicable rules.

How to use the Ontario rebates

Start by confirming the date of your builder agreement, the property value and whether the purchase meets the relevant program’s conditions.

Then review the purchase agreement and statement of adjustments with your lawyer to identify which rebates are already included in the price.

The rebate application may be submitted by the builder or purchaser, depending on how the transaction is structured.

Charlotte’s Tip: New construction requires careful planning. Builder deposits, closing adjustments, occupancy arrangements and rebate eligibility all need to be reviewed before committing to a purchase.

Read the Ontario first-time buyer rebate rules.

Learn about Ontario’s Enhanced New Housing Rebate.

 7. 30-Year Mortgage Amortization: More Monthly Payment Flexibility

Not every first-time buyer benefit comes in the form of a tax refund or savings account.

Some provide additional flexibility in structuring your mortgage.

Eligible first-time buyers can access a 30-year amortization on insured mortgages. This option is also available for qualifying purchases of newly constructed homes.

What’s the difference between 25 and 30 years?

Your amortization is the total estimated period over which your mortgage would be repaid based on its scheduled payments.

A longer amortization generally means:

– Lower required monthly mortgage payments
– Greater monthly cash-flow flexibility
– More interest paid over the mortgage’s lifetime, assuming comparable terms and rates

How to use this option

During your mortgage pre-approval, compare a 25-year mortgage with a 30-year mortgage.

Look at the monthly payment, mortgage insurance premiums, total borrowing costs and long-term financial goals.

A lower monthly payment may make budgeting more comfortable, but it isn’t automatically the best financial choice.

Charlotte’s Tip: I believe your mortgage should fit your life, not consume it. Understanding the payment options before making an offer helps you make a more confident decision.

Learn about Canada’s expanded 30-year insured mortgage options.

8. Minimum Down Payments: You May Not Need 20% to Buy Your First Home

One of the biggest misconceptions about buying a home is that you must save a 20% down payment before you can qualify.

That’s simply not true for every purchase.

In Canada, eligible buyers can purchase certain properties with a down payment starting at 5%, using mortgage default insurance.

This is a financing option available to qualifying buyers generally, not a first-time buyer grant.

How much down payment do you need in Ontario?

For an eligible property:

Home purchase price | Minimum down payment

$500,000 or less | 5%
Above $500,000 but below $1.5 million | 5% on the first $500,000, plus 10% of the remaining amount
$1.5 million or more | Generally 20%

Example: Buying a $600,000 Home

If you purchase a home for $600,000:

5% of the first $500,000 = $25,000

10% of the remaining $100,000 = $10,000

**Minimum down payment: $35,000**

That’s significantly less than the $120,000 you would need for a 20% down payment.

There are important additional considerations.

With less than 20% down, mortgage default insurance is generally required. Buyers must still qualify based on lender and insurer requirements, and need money for legal fees, applicable land transfer tax, moving expenses and other closing costs.

Charlotte’s Tip: Don’t confuse the minimum down payment with the total amount needed to purchase a home. Your complete budget needs to account for both.

Read the Financial Consumer Agency of Canada’s down payment guide.

Can You Combine First-Time Home Buyer Incentives in Ontario?

In many cases, yes, provided you meet the requirements of each program.

For example, a qualifying first-time buyer purchasing a resale home might use an FHSA and the RRSP Home Buyers’ Plan toward the down payment, receive an Ontario land transfer tax refund at closing and claim the federal Home Buyers’ Amount when filing taxes.

They may also qualify for insured mortgage financing with a smaller down payment and a 30-year amortization.

Someone purchasing eligible new construction may have additional GST/HST rebate opportunities.

The important distinction is that these programs work differently. Some involve your own savings, some reduce taxes, some provide rebates, and others change how your mortgage is structured.

**You cannot simply add every amount together and assume you’ll receive that much money.**

Each program has its own conditions, limits and timing requirements.

First-Time Home Buyer Incentives in Kitchener, Waterloo, Cambridge and Guelph

If you’re considering your first property in Waterloo Region or Wellington County, your purchase strategy should begin well before you start visiting open houses.

A home in Kitchener may come with different property taxes, carrying costs and housing options than a similar home in Cambridge, Waterloo, Elmira or Guelph.

Whether you’re considering a condominium, townhouse, semi-detached home or detached property, it’s important to understand the full financial picture.

As a Mortgage Agent Level 2 serving Ontario, I help buyers review their financing options, understand lender requirements and prepare a mortgage strategy that supports their goals.

That includes exploring available first-time buyer programs and determining which ones may be relevant to their circumstances.

Frequently Asked Questions About First-Time Home Buyer Incentives

Can I use an FHSA and RRSP Home Buyers’ Plan together?

Yes. Eligible purchasers can use a qualifying FHSA withdrawal and the RRSP Home Buyers’ Plan toward the same qualifying home, provided they meet the requirements of both programs.

Is there a first-time home buyer grant in Ontario?

There isn’t one universal cash grant available to every first-time buyer. However, there are federal and provincial tax credits, refunds, rebates and savings programs that may provide significant financial advantages.

Some communities or housing providers may offer additional assistance programs with separate eligibility requirements.

Do first-time buyer incentives apply to resale homes?

Several do, including the FHSA, the Home Buyers’ Plan, Ontario’s land transfer tax refund and the federal Home Buyers’ Amount.

The first-time buyer GST/HST rebates are generally directed toward qualifying newly constructed or substantially renovated housing rather than ordinary resale purchases.

Am I considered a first-time buyer if I owned a home years ago?

Possibly, for certain federal programs.

Some federal programs use a four-year lookback period, while Ontario’s land transfer tax refund has different rules concerning previous ownership.

This is why eligibility should be checked separately for each incentive.

Should I open an FHSA before I’m ready to buy?

It can be advantageous to open an FHSA early if you’re eligible and the account fits your savings plan, because participation room begins accumulating once your first FHSA is opened.

Your First Home Starts With a Financial Plan

Buying your first home should feel exciting, not overwhelming.

The more you understand about available programs, down payment strategies and mortgage options, the better prepared you’ll be to make informed decisions.

You don’t need to understand every mortgage rule before getting started.

You just need a plan, the right information and someone who can help you connect the pieces.

If you’re considering buying your first home in Kitchener, Waterloo, Cambridge, Guelph, Elmira or anywhere in Ontario, I’d be delighted to help you explore your options.

Ready to take the next step?

Visit Mortgage with Char to learn more, or start your mortgage application here  https://tinyurl.com/CharlotteFergusonMortgages.

Let’s make sure you understand what’s available before you make one of life’s biggest purchases.

Charlotte Ferguson
Mortgage Agent Level 2 | Licence M08009211
Dominion Lending Centres National Ltd. | Brokerage Licence #12360
Mortgages by Charlotte  www.mortgagewithchar.com
Instagram: @mortgagesbycharlotte

*Disclaimer: Program information is current as of October 8, 2026, and is provided for educational purposes. Government programs, eligibility rules, lending policies, tax rates and rebate availability may change. The information does not constitute personalized mortgage, legal, tax or financial advice. Consult the appropriate qualified professionals and verify current program requirements before making purchasing decisions. Mortgage approval is subject to lender and insurer requirements.*