Canada First-Time Home Buyer Guide

the first-time home buyer programs in Canada. The Home Buyers' Plan (HBP) allows the first-time home buyer to withdraw up to $60,000 from the RRSP tax-free (with the 15-year repayment). The First Home Savings Account (FHSA) allows the taxpayer to save up to $60,000 (the $8,000 annual limit) with the tax-deductible contributions and the tax-free withdrawals for the first home. The First-Time Home Buyer Incentive (the shared-equity mortgage with the Government of Canada) is currently paused (as of the 2025-26 Federal Budget, the program has been discontinued for the new applications). The Ontario Land Transfer Tax Rebate provides up to $4,000 for the first-time home buyers (the full refund of the Ontario LTT). The BC First Time Home Buyers' Program provides the full exemption from the Property Transfer Tax (the PTT) on the first $500,000 of the purchase price (for the properties up to $835,000). The GST/HST New Housing Rebate provides up to $6,300 for the new construction homes (the "new housing rebate" — the GST/HST paid on the new home). The minimum down payment is 5% on the first $500,000, 10% on $500,000-$1 million, and 20% on the amount above $1 million (the 20% down payment is required to avoid the CMHC mortgage insurance). The mortgage stress test — the qualifying rate for the uninsured mortgages (the mortgages with the 20%+ down payment) is the 5.25% or the "contract rate + 2%", whichever is higher. The CMHC mortgage insurance (the "default insurance") is required for the mortgages with the down payment below 20%.

First-Time Home Buyer Definition

HBP and FHSA: The taxpayer must not have owned a home (or the spouse must not have owned a home) in the prior 4 calendar years. The "first-time home buyer" status is based on the "owner-occupied" home (the taxpayer must not have lived in a home owned by the taxpayer or the spouse).
Land transfer tax rebates: The first-time home buyer definitions vary by the province (the Ontario definition: the taxpayer must not have owned the home anywhere in the world in the prior 4 years; the BC definition: the taxpayer must be the Canadian citizen or the permanent resident and must not have owned the principal residence in the prior 4 years).
Disabled taxpayer: The disabled taxpayer (the DTC certification) does NOT need to be the first-time home buyer for the HBP — the HBP for the disabled taxpayer is available for the purchase of the accessible home (the "accessible housing" — the home that meets the accessibility needs).

Down Payment Rules

Minimum down payment: 5% on the first $500,000 of the purchase price. 10% on $500,000-$1 million (the "sliding scale" — 5% on the first $500,000 plus 10% on the amount above $500,000). 20% on the amount above $1 million (the "conventional mortgage" — the 20%+ down payment avoids the CMHC insurance).
CMHC insurance: The Canada Mortgage and Housing Corporation (CMHC) provides the mortgage default insurance for the mortgages with the down payment below 20%. The insurance premium is 2.8% to 4% of the mortgage amount (the "CMHC premium" is added to the mortgage). The Sagen and the Canada Guaranty are the private mortgage insurers (the alternatives to the CMHC).
Gift down payment: The down payment can be the "gift" from the family (the parent, the grandparent, the sibling) — the borrower must provide the signed "gift letter" confirming that the gift is NOT repayable.

GST/HST New Housing Rebate

New construction: The purchaser of the new home (the "new construction" — the newly built home, the substantially renovated home, or the mobile home) can claim the GST/HST New Housing Rebate. The rebate recovers 36% of the GST paid (up to $6,300 for the homes priced up to $350,000). The rebate phases out on the properties between $350,000 and $450,000.
Assignment sales: The assignment sale (the "pre-construction assignment" — the original buyer assigns the contract to the new buyer) may affect the GST/HST rebate eligibility. The assignee (the new buyer) may be eligible for the rebate if the home is the principal residence.
Rental property rebate: The owner of the new rental property (the "purpose-built rental" — the landlord who rents the new home) can claim the "GST/HST New Residential Rental Property Rebate" — the rebate is available for the landlord who builds or buys the new home and rents it as the principal residence.

For the FHSA and the contribution rules, see our FHSA Guide →. For the HBP and the RRSP withdrawal rules, see our Home Buyers' Plan Guide →.