2025 Canada First-Time Home Buyer's Guide - Programs & Incentives

Q: What is the maximum RRSP contribution amount for a first-time home buyer?

Under the RRSP Home Buyers’ Plan (HBP), first-time home buyers can withdraw up to $60,000 from their RRSP to put toward a home purchase. There’s no special contribution limit for the HBP itself; your annual RRSP contribution room is still determined by your income and CRA limits. You’ll need to ensure the funds have been in your RRSP for at least 90 days before withdrawal.

Q: How much money can I put in my FHSA?

Th e First Home Savings Account is an other program offered by the federal government to help first-time home buyers save a down payment. Savers can contribute up to $8,000 per year, with a lifetime contribution cap of $40,000. Any investment growth within the account is not subject to withdrawal limits, meaning all funds — including earnings — can be accessed tax-free when used for a qualifying home purchase. Those who are saving up for a home purchase with a partner can each have an FHSA if they are both first-time buyers, up to a combined contribution limit of $80,000.

Q: What bank offers the FHSA in Canada?

The First Home Savings Account was launched on April 1, 2023, and is available at all of Canada’s federally-regulated financial institutions.

Jamie David, Sr. Director of Marketing and Mortgages

June 12, 2025

Being a first-time home buyer can be both exciting… and expensive! After all, most people don’t have proceeds from the sale of a property to fund their first purchase. Fortunately, the Canadian government offers a number of first-time home buyer programs to ease that financial burden. This guide covers everything you need to know, from federally-backed savings programs such as the RRSP Home Buyers’ Plan and the new First Home Savings Account, to tax breaks and provincial incentives. Start with the video below on the 2025 mortgage rule changes, then keep reading for more information.

WATCH: 2025 mortgage rule changes for first-time home buyers

First-time home buyers: Frequently asked questions

How do I qualify as a first-time home buyer in Canada?

To qualify as a first-time home buyer in Canada, you must meet the following criteria set out in the Income Tax Act:

You’re a Canadian resident and at least 18 years old at the time you withdraw any funds from a registered government plan (like the Home Buyers’ Plan) to buy your first home.
You haven’t lived in a home that you or your spouse/common-law partner owned during the current calendar year or the previous four years.
If your marriage or common-law relationship has broken down, you may regain first-time buyer status after living apart for at least 90 days (unless you move into a new home with a new partner within that time).
You intend to live in the home as your primary residence, not as an investment or rental property.

Some programs may have additional requirements related to your immigration status, documentation, or purchase details. You can learn more about the definition of a First-Time Home Buyer on the federal government’s website.

How much do first time home buyers have to put down in Canada?

The amount you save for your down payment doesn’t actually depend on whether you’re a first-time buyer or not. Instead, the minimum amount you must put down is based on the purchase price of the property:

If the purchase price is less than $500,000, the minimum down payment is 5%.
If the purchase price is between $500,000 and $1,499,999, the minimum down payment is 5% of the first $500,000 and 10% of any amount over $500,000 to $1,499,999.
If the purchase price is $1,500,000 or more, the minimum down payment is 20%.

What was the Canadian government's First-time home buyers’ incentive (FTHBI)?

The First Time Home Buyer Incentive (FTHBI) was a program offered through the federal government to help first-time home buyers with down payments. It was discontinued as of March 31, 2024. The incentive offered an interest-free loan of 5% to 10% of a home’s purchase price. Repayment was required within 25 years or when the home was sold, whichever came first. In exchange, the government shared the equity built up in the home; you’d pay back more if it appreciated in value or less if it depreciated. Repayments were capped at a maximum annual gain or loss of 8%.

What is the maximum RRSP contribution amount for a first-time home buyer?

How much money can I put in my FHSA?

The First Home Savings Account is another program offered by the federal government to help first-time home buyers save a down payment. Savers can contribute up to $8,000 per year, with a lifetime contribution cap of $40,000. Any investment growth within the account is not subject to withdrawal limits, meaning all funds — including earnings — can be accessed tax-free when used for a qualifying home purchase. Those who are saving up for a home purchase with a partner can each have an FHSA if they are both first-time buyers, up to a combined contribution limit of $80,000.

What bank offers the FHSA in Canada?

How much does mortgage insurance cost for first-time buyers?

Mortgage insurance – also referred to as default insurance or CMHC insurance – is required when you put down less than 20% of a home’s purchase price, and it’s charged as a percentage of your mortgage amount. Its purpose is to protect the lender in case the home buyer becomes unable to make their mortgage payments, as those with smaller down payments are considered to pose a higher risk of this. The insurance rate depends on how much you put down and your amortization period. Requiring mortgage insurance and having a 30-year amortization is only an option for first-time home buyers, under a rule change made by the federal government in the Fall of 2024.

You need to pay a 4.20% premium if your down payment is between 5% and 9.99%.
You need to pay a 3.30% premium if your down payment is between 10% and 14.99%.
You need to pay a 3.00% premium if your down payment is between 15% and 19.99%.

Note: Mortgage default insurance is not available for homes priced over $1.5 million. If you’re buying a property above this threshold, you’ll need a minimum 20% down payment.

Programs for first-time home buyers in Canada

Here are some of the main first-time home buyer programs you should be aware of. Have a look at this video, and then read on to learn more.

WATCH: First-time home buyer programs in Canada: What you need to know

First Home Savings Account

The First Home Savings Account, introduced on April 1, 2023, is a tax-free savings vehicle that combines features from both TFSAs (Tax Free Savings Accounts) and RRSPs (Registered Retirement Savings Plans). Your contributions are tax-deductible, and withdrawals used for a qualifying home purchase are also tax-free. Unlike the RRSP Home Buyers’ Plan, you don’t have to repay the funds you withdraw to the account.

To open a First Time Savings Account, you'll need to confirm your eligibility and provide government-issued ID and your SIN to get started. Here are the contribution limits:

You can contribute up to $8,000 per year, with unused room carried forward
The lifetime limit is $40,000
Couples can each open an FHSA, doubling total savings to $80,000

To withdraw funds, you must have a signed agreement to purchase a home. If you don’t end up buying, your savings can be transferred to your RRSP without tax penalties. The account can remain open for up to 15 years, or until the end of the year you buy your first home (whichever comes first).

Watch the video below to learn more about the First Home Savings Account.

WATCH: How to use the First Home Savings Account

RRSP Home Buyers' Plan

The RRSP Home Buyers’ Plan (HBP) lets first-time home buyers withdraw up to $60,000 to use toward a down payment from their RRSP, without having to pay taxes on the withdrawn portion (removing funds from an RRSP for any other reason prior to retirement usually requires it being taxed as income for the year at your personal income tax rate).. To qualify, you must not have owned a home (or lived in a spouse or partner’s home) within the last four years. You must also plan to live in the new home as your primary residence, and the RRSP funds must have been on deposit for at least 90 days before the purchase.

Eligible buyers have five years before they must begin repaying the withdrawn amount. This applies to HBP withdrawals made between January 1, 2022, and December 31, 2025. You’ll have 15 years to repay the full amount to your RRSP. If you miss a required annual repayment, that amount will be taxed as income for that year.

While the HBP helps reduce upfront costs, using your RRSP now can impact your long-term retirement savings. Weigh the trade-offs before deciding.

Land Transfer Tax Rebate

Some Canadian provinces charge a land transfer tax when you buy a house. This is generally between 0.5% and 2.0% of the purchase price of the property, and represents the largest closing cost you'll have to pay. In an effort to help first-time home buyers, certain provinces, like British Columbia, Ontario, and Prince Edward Island, offer a rebate on some or all of this tax if you're eligible. Home buyers in the City of Toronto are also eligible to receive a rebate on the city’s land transfer tax, in addition to the provincial rebate.

Here are the maximum rebates for the four provinces:

First Time Home Buyers' Tax Credit

The First-Time Home Buyers' Tax Credit helps offset some of the upfront costs of purchasing a home, such as legal fees, home inspections, and closing costs. Eligible buyers can claim up to $10,000 on their tax return for a qualifying home. Since it’s a non-refundable credit, the amount is multiplied by the lowest federal tax rate (15%), reducing your income tax payable by up to $1,500. However, if your tax owing is already $0, you won’t get the credit as a refund.

If you’re wondering how to get your First Time Home Buyer Tax Credit, you can simply claim it on Line 31270 of your tax return. If you're buying the home with another eligible person (such as a spouse or family member), you can split the credit, but the combined total can’t exceed $10,000.

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GST exemption on newly constructed homes

In March 2025, the newly-minted Prime Minister Mark Carney introduced a campaign promise to eliminate the 5% Goods and Services Tax (GST) for first-time home buyers purchasing newly constructed or “substantially renovated” properties priced at $1 million or under. Removing GST means buyers could save up to $50,000 on a $1-million home, potentially making ownership more affordable and encouraging builders to increase the housing supply.

Home Purchase Assistance Program in Montréal

If you're buying your first home in Montréal, you might want to check the city’s Home Purchase Assistance Program. First-time buyers of new homes can get a lump-sum payment of up to $15,000, depending on the home’s location, size, and household type. Financial support for new homes-

Single buyers (no children): Assistance of $5,000 for homes up to $305,000.
Multiple buyers (no children): Same $5,000 assistance, but for homes up to $380,000.
Families with at least one child under 18: Up to $15,000 for homes up to $610,000 and $10,000 for porches up to $540,000.
Location premiums: If your new home meets environmental certification, you can receive $2,500 more and if it’s located downtown, assistance can increase by $5,000.

Families with at least one child under 18 who purchase an existing home may qualify for a welcome tax (real estate transfer tax) refund of $5,000 to $7,000 for properties priced up to $725,000.

Support for newcomers buying their first home in Canada

While many federal and provincial newcomer programs are available in Canada, it’s equally important to understand the practical aspects of navigating the system as a new resident.

1. Get familiar with Canadian mortgage requirements

To qualify for a mortgage as a newcomer, most lenders will require proof of income, employment history, and your immigration status, such as a permanent resident card or work permit. Down payment rules are the same for all homebuyers: 5% for homes under $500,000, 10% for the portion of the price between $500,000 and $1.5 million, and 20% for homes priced above $1.5 million. However, if you’re putting down less than 20%, you’ll need mortgage default insurance. As of December 15, 2024, first-time home buyers borrowers also have the option to extend their amortization to 30 years.

WATCH: How a 30-year amortization impacts your mortgage payments

2. Build or transfer your credit history

A strong Canadian credit history helps you qualify for better mortgage rates, but newcomers often start with no domestic credit record. Consider opening a secured credit card and make timely payments for everyday expenses to establish your creditworthiness. Some lenders may also accept international credit reports or financial references from your home country — ask your lender if they support this.

3. Plan for additional costs beyond the down payment

In addition to your down payment, budget for closing costs like legal fees, home inspections, title insurance, and property taxes. These can add up to 1.5%-4% of your home’s price. If you're using international savings, factor in currency conversion rates and transfer fees. You may also need to pay land transfer tax, though rebates are available for first-time buyers in provinces like Ontario, British Columbia, and Prince Edward Island.

Also read- Should you always save a 20% down payment when you buy a home?

4. Prepare for newcomer-specific tax implications

As a newcomer, you may encounter unique tax considerations when buying your first home. For example, non-residents in Ontario and British Columbia may be subject to the Non-Resident Speculation Tax (NRST). If you plan to live in your new home, ensure it’s designated as your principal residence to qualify for tax exemptions on future capital gains

5. Take advantage of newcomer mortgage programs

Canada’s major mortgage insurers — Canada Mortgage and Housing Corporation (CMHC), Sagen, and Canada Guaranty — offer specialized programs to help newcomers access financing for their first home. These programs are designed for individuals who might not meet traditional requirements, such as an established Canadian credit history. You can also consult a mortgage broker to find the best-suited program for your situation.

New to Canada? Check out Ratehub.ca’s financial resources for newcomers

Other tax incentives for Canadian homeowners

Owning a home in Canada comes with significant costs, but several federal tax incentives can help offset them. Apart from the first-time buyers’ program above, there are others are available to all homeowners:

Multigenerational Home Renovation Tax Credit (MHRTC) - This credit supports families creating self-contained secondary units (like in-law suites) to accommodate multiple family members under one roof. You can claim up to $50,000 in eligible renovation expenses and receive 15% back as a tax credit (maximum of $7,500 per claim)
Home Accessibility Tax Credit - This non-refundable tax credit helps cover the cost of renovations that make a home more accessible for people with disabilities. The alterations must be created to allow an individual to be mobile or functional within the dwelling, gain access to the building, or reduce their risk of harm within it. The HATC has an annual expense limit of $20,000, with a tax credit up to $3,000.
GST/HST New Housing rebate - The GST/HST New Housing Rebate helps recover part of the GST/HST you paid on a new or substantially renovated home. The rebate is only available to individuals, not corporations or partnerships. Provincial housing rebates may be available as well, even if you don’t qualify for the federal HST portion.

What first-time homebuyers should know about the U.S. tariffs

In early 2025, the United States imposed a 25% tariff on non-CUSMA-compliant Canadian goods, a 10% tariff on energy,50% tariff on steel and aluminum, and a 25% global tariff on vehicles and auto parts. This prompted Canada to retaliate with its own 25% tariff on $ 30 billion worth of U.S. imports, as well as US-made vehicles. This uncertainty surrounding tariffs affects the mortgage market in two main ways:

Following the announcements in early April, bond yields briefly dipped to the 2.5–2.6% range, but have since rebounded to the upper 2.8% - 2.9% range as of June 2025, which is keeping fixed mortgage rates elevated. While this may limit affordability gains, current rates are still well below the highs of the past two years.
Before U.S. tariff tensions, the Bank of Canada (BoC) was on track to bring the overnight lending rate down to between 2 - 2.5%. However, it held the rate steady in both April and June, citing concerns about inflation driven by trade costs. A deeper economic slowdown could lead to cuts later in the year, but the outlook remains unclear.

Tariffs can also lead to a potential rise in unemployment or weaker wage growth, limiting how much first-time buyers can qualify for — or feel comfortable taking on.

Provincial first-time home buyer programs

Most first-time home buyer programs are found at the federal level, but there are several provinces that have their own programs as well (along with the land transfer tax rebates we mentioned earlier). Quebec, for example, offers an additional tax credit (max $750) to first-time homebuyers.

To properly understand what you'll be eligible for in your province, it's worth speaking to a mortgage broker near you - consultations are free. Below are all of our provincial first-time home buyer pages, where you can find detailed, province-specific information.

First-time home buyer education topics

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