Buying your first home in Canada involves navigating a maze of government programs, tax rebates, and mortgage rules — many of which can be stacked to save tens of thousands of dollars. This guide covers every program available to first-time buyers in 2026, with current rules, limits, and exactly how to combine them.

Quick Reference — All Programs at a Glance

1. First Home Savings Account (FHSA)

The FHSA is the single best tool for first-time buyers. It combines RRSP-style tax deductions with TFSA-style tax-free growth and withdrawal — and unlike the HBP, you never have to pay it back.

How It Works

Why FHSA First

The FHSA should be your first stop for home savings because:

1. Tax deduction now — Every dollar contributed reduces your taxable income
2. Tax-free growth — No tax on gains, dividends, or interest while saving
3. Tax-free withdrawal — No tax when you buy your home (unlike the HBP, which must be repaid)
4. No repayment — It's not a loan. The money is yours, permanently
5. Fallback to RRSP — If you never buy, funds transfer to RRSP without penalty

If you opened an FHSA and an RRSP on the same day with the same investment, the FHSA would leave you ahead by the amount of tax you'd eventually pay on RRSP withdrawals.

Wealthsimple supports FHSA accounts with commission-free trading. $0 account fees.

2. Home Buyers' Plan (HBP)

The HBP lets you withdraw up to $60,000 from your RRSP to buy or build your first home — tax-free. You have 15 years to repay it.

How It Works

FHSA + HBP: Yes, You Can Use Both

The CRA has confirmed you can combine FHSA and HBP for the same qualifying home purchase. A couple could access:

• FHSA: $8,000 × 2 people = $16,000/year (up to $80,000 lifetime combined)
• HBP: $60,000 × 2 people = $120,000
• Total tax-advantaged: Up to $200,000

The tax deduction from FHSA contributions adds further savings — at a 33% marginal rate, the couple's $16,000 FHSA contribution generates $5,280 in tax refunds.

3. First-Time Home Buyer Incentive (FTHBI) — ❌ DISCONTINUED

The FTHBI is no longer accepting applications. CMHC has removed the program page entirely. Many articles online still reference it — ignore them.

The FTHBI was a shared-equity mortgage program where CMHC contributed 5% (resale) or 10% (new construction) toward your down payment in exchange for a share of your home's future value. It was discontinued due to low uptake and criticism that the shared-equity structure was disadvantageous to buyers.

What to use instead: The FHSA is a superior alternative. Unlike the FTHBI, the FHSA doesn't dilute your equity.

4. GST/HST New Housing Rebate

If you're buying a newly built home or substantially renovating, you may qualify for a rebate on the GST/HST paid. A major expansion took effect March 2025.

Federal GST/HST Rebate

New FTHB GST/HST Rebate (March 2025+)

For agreements entered into on/after March 20, 2025 until 2031:

Provincial Portions

5. Provincial Land Transfer Tax Rebates

Land transfer taxes are provincial — rates and first-time buyer rebates vary significantly.

Ontario

Important: Ontario uses a stricter definition of "first-time buyer" for LTT than federal programs. Federal uses a 4-year lookback; Ontario permanently disqualifies anyone who has ever owned a qualifying home anywhere in the world.

British Columbia

Alberta

No provincial land transfer tax. Title transfer fees are approximately $250 in total — the lowest in Canada.

Quebec

No general provincial FTHB land transfer tax rebate. The "welcome tax" (transfer duties) applies. Some municipalities offer local programs.

Other Provinces

Saskatchewan, Manitoba, New Brunswick, Nova Scotia, PEI, Newfoundland and Labrador: Land transfer taxes exist but first-time buyer rebates are limited or non-existent. Check your province's finance ministry website for current programs.

6. Mortgage Stress Test Rules (2026)

Before a lender approves your mortgage, you must pass the stress test — proving you can afford payments at a higher interest rate than you'll actually pay.

Example: Stress Test in Practice

If you're offered a 4.50% mortgage rate:

• Qualifying rate = 6.50% (4.50% + 2%)
• You must demonstrate you can afford payments at 6.50%, not 4.50%

This reduces your maximum borrowing power by roughly 15-20% below what you could technically afford at the actual rate.

Source: OSFI B-20 Guideline

How to Stack These Programs (With Examples)

Example 1: Couple Buying a $700K Resale Home in Toronto

Example 2: Single Buyer, $500K New Build in BC

Example 3: Couple, $400K New Build in Alberta

Frequently Asked Questions

Can I use FHSA and HBP for the same home?

Yes. The CRA has confirmed FHSA and HBP can be combined for the same qualifying home purchase. You can use FHSA funds and HBP withdrawals toward the same down payment.

What if I open an FHSA but never buy a home?

You can transfer FHSA funds to your RRSP without tax consequences, and it won't use your RRSP contribution room. Alternatively, you can withdraw the funds — but they'll be taxed as income plus a withholding tax.

Is the FTHBI really discontinued?

Yes. CMHC removed all program pages. Applications are no longer accepted. Any online article still describing FTHBI as available is out of date.

What's the difference between Ontario and federal "first-time buyer" definitions?

Federal programs (FHSA, HBP, GST rebate) use a 4-year lookback: you haven't owned a qualifying home in the current year or prior 4 calendar years. Ontario's LTT rebate permanently disqualifies anyone who has ever owned a qualifying home anywhere in the world — the lookback is forever.

How much do I actually need for a down payment?

Minimum 5% on the first $500,000 + 10% on $500,001–$999,999 + 20% on $1,000,000+. Below 20% down requires CMHC mortgage insurance (2.8%–4.0% of mortgage amount, added to your loan).

Next Steps

1. Open an FHSA before contributing to your RRSP — the FHSA gives you the deduction without the eventual tax bill
2. Check your RRSP room on CRA My Account before planning HBP withdrawals
3. Research provincial rebates specific to your province — land transfer tax savings can be substantial
4. Get pre-approved to understand your stress-test borrowing limit before house hunting
5. Read our TFSA vs RRSP vs FHSA guide for the full contribution priority breakdown

Related guides:

• TFSA vs RRSP vs FHSA: Which Should You Use First?
• How to Budget in Canada
• Emergency Fund Guide

This guide is for educational purposes only. Tax rules, program eligibility, and mortgage regulations change. Verify current rules with the CRA, your province's finance ministry, and a qualified mortgage professional before making decisions.