First-Time Home Buyer Incentives in Ontario 2026
Every grant, rebate, and tax credit available to first-time buyers in Ontario—totaling up to $48,475+ in potential savings.
Quick Summary: Total Potential Savings
| Program | Max Benefit | Type |
|---|---|---|
| Ontario LTT Rebate | $4,000 | Rebate |
| Toronto MLTT Rebate | $4,475 | Rebate |
| First Home Savings Account (FHSA) | $40,000 | Tax-Free Savings |
| Home Buyers' Plan (HBP) | $60,000 | RRSP Withdrawal |
| First-Time Home Buyers' Tax Credit | $1,500 | Tax Credit |
| GST/HST New Housing Rebate | $30,000+ | Rebate (New Builds) |
| Total Potential (Toronto) | $139,975+ |
Ontario Land Transfer Tax Rebate
Up to $4,000
Provincial rebate for first-time buyers
The Ontario Land Transfer Tax (LTT) Rebate provides first-time homebuyers with up to $4,000 in relief. This covers the entire LTT for homes valued at $368,000 or less. For properties above this value, you receive the maximum $4,000 rebate.
Source: Ontario Ministry of Finance
Eligibility Requirements
Age Requirement
Must be at least 18 years old
Residency
Canadian citizen or permanent resident
Principal Residence
Must occupy within 9 months of closing
No Prior Ownership
Never owned a home anywhere in the world
Spouse Ownership Rule
If your spouse has owned a home while being your spouse, you are not eligible. However, if they owned a home before becoming your spouse, you may still claim a proportionate refund.
Toronto Municipal Land Transfer Tax Rebate
Up to $4,475
Additional rebate for Toronto buyers
If you're buying in the City of Toronto, you're subject to both provincial and municipal land transfer taxes—but you're also eligible for both rebates. The Toronto MLTT rebate covers the full municipal tax for homes up to $400,000.
Combined Savings in Toronto
$8,475
$4,000 Provincial + $4,475 Municipal
LTT Calculation Example
Example: $800,000 home in Toronto
Calculate your exact LTT: WOWA Land Transfer Tax Calculator
First Home Savings Account (FHSA)
$40,000 Lifetime
Tax-free savings + tax deduction
The FHSA combines the best features of RRSPs and TFSAs: tax-deductible contributions (like an RRSP) and tax-free withdrawals for your first home (like a TFSA). Introduced in April 2023, this is now the most powerful savings tool for first-time buyers.
Contribution Limits
- $8,000 annual contribution limit
- $40,000 lifetime limit
- Unused room carries forward
- 15-year maximum account lifespan
Tax Benefits
- Contributions are tax-deductible
- Investment growth is tax-free
- Withdrawals for home purchase are tax-free
- Can be combined with HBP
Example: 5-Year FHSA Strategy
A buyer earning $75,000/year in the 29.65% marginal tax bracket:
• Contribute $8,000/year × 5 years = $40,000
• Tax savings: $40,000 × 29.65% = $11,860
• If investments grow 7% annually: ~$46,000 total
• All $46,000 withdrawn tax-free for your home
Learn more: CRA First Home Savings Account
Home Buyers' Plan (HBP)
Up to $60,000
Tax-free RRSP withdrawal ($60,000 per person)
The Home Buyers' Plan allows first-time buyers to withdraw up to $60,000 from their RRSPs tax-free to purchase a home. If buying with a partner who also qualifies, you can withdraw up to $120,000 combined.
Repayment Requirement
You must repay the withdrawn amount over 15 years, starting the second year after withdrawal. Minimum annual repayment: 1/15th of the total (e.g., $4,000/year on a $60,000 withdrawal).
FHSA + HBP Strategy
You can use both the FHSA and HBP for the same home purchase. Maximum combined: $40,000 (FHSA) + $60,000 (HBP) = $100,000 per person or $200,000 for couples.
Source: CRA Home Buyers' Plan
First-Time Home Buyers' Tax Credit (HBTC)
$1,500
Non-refundable federal tax credit
The HBTC provides a $10,000 non-refundable tax credit at the lowest federal tax rate (15%), resulting in $1,500 in tax savings. You can claim this on your tax return for the year you purchased your home.
Unlike the LTT rebate, this credit is available for homes purchased anywhere in Canada, not just Ontario.
GST/HST New Housing Rebate
Up to $30,000+
For new construction or substantial renovations
If you're buying a newly built home or a home with substantial renovations, you may be eligible for a rebate on the GST/HST paid. In Ontario, this includes both federal GST rebate and provincial HST rebate components.
Eligibility for New Housing Rebate
- • Newly constructed home (builder sells to you)
- • Substantial renovation (90%+ of interior renovated)
- • Must be your primary residence
- • Full federal rebate for homes under $350,000; partial up to $450,000
- • Full Ontario rebate for homes under $400,000
Understanding the Mortgage Stress Test
Before you can take advantage of these incentives, you need to qualify for a mortgage. In Canada, all federally regulated lenders require you to pass the mortgage stress test.
Stress Test Requirements (2026)
You must qualify at the higher of:
5.25%
Benchmark rate (floor)
Your Rate + 2%
Contract rate plus buffer
Example: If your lender offers 4.5%, you must prove you can afford payments at 6.5% (4.5% + 2%), since that's higher than 5.25%.
GDS Ratio
Gross Debt Service: Housing costs (mortgage, taxes, heating) should not exceed 39% of gross income.
TDS Ratio
Total Debt Service: All debts (including housing) should not exceed 44% of gross income.
Your First-Time Buyer Action Checklist
Open an FHSA immediately
Even if you're not ready to buy, start building tax-free savings now.
Maximize RRSP contributions if planning HBP withdrawal
Funds must be in RRSP for 90 days before HBP withdrawal.
Get mortgage pre-approval
Know your budget before house hunting. Locks in rate for 90-120 days.
Claim LTT rebate at closing
Your lawyer will help you file the rebate claim during registration.
File for HBTC on your tax return
Claim the $1,500 tax credit on Line 31270 of your return.
Official Resources
- • Ontario Land Transfer Tax Refunds - Ontario Ministry of Finance
- • Toronto Municipal Land Transfer Tax - City of Toronto
- • First Home Savings Account (FHSA) - Canada Revenue Agency
- • Home Buyers' Plan (HBP) - Canada Revenue Agency
- • Complete First-Time Buyer Programs - RateHub