For many Ontarians, the dream of owning a home feels like a significant financial mountain to climb. The combination of property prices and the need for a substantial down payment can seem daunting. The good news is that you don’t have to do it alone. Both the federal and provincial governments have created a suite of programs specifically designed to help first-time homebuyers get their foot in the door.

These incentives, credits, and rebates can translate into thousands of dollars in savings, making your path to homeownership smoother and faster. Understanding these programs is a crucial step in your journey, right alongside getting your mortgage pre-approval and finding the right real estate agent. As of July 2025, here is a clear and up-to-date guide to the key government programs available to first-time homebuyers in Ontario.

1. The Superstar Saver: The First Home Savings Account (FHSA)

Arguably the most powerful tool ever created for Canadian home savers, the FHSA is a must-have for any prospective first-time buyer. It combines the best features of an RRSP and a TFSA.

  • How it Works: Like a Registered Retirement Savings Plan (RRSP), your contributions to an FHSA are tax-deductible, meaning they reduce your taxable income for the year you contribute. Like a Tax-Free Savings Account (TFSA), when you withdraw the funds to buy a qualifying home, the entire amount—including all investment growth—is completely tax-free. It’s the best of both worlds: tax-free in, tax-free out.
  • The Numbers: You can contribute up to $8,000 per year, with a lifetime contribution limit of $40,000. If you don’t contribute the full $8,000 in one year, the unused portion (up to $8,000) can be carried forward to the next year.
  • Who is Eligible? You must be a Canadian resident, at least 18 years old, and a first-time homebuyer (meaning you haven’t owned and occupied a home as your principal residence in the current year or the preceding four calendar years).

2. The Classic Down Payment Booster: The RRSP Home Buyers’ Plan (HBP)

The Home Buyers’ Plan is a long-standing program that allows you to borrow from your own retirement savings to fund your down payment.

  • How it Works: The HBP lets you withdraw funds from your RRSPs to buy or build a qualifying home for yourself. The withdrawal is not taxed, provided you repay it over a set period.
  • The Numbers: As of 2024, the withdrawal limit has been significantly increased to $60,000 per person. This means a couple can potentially access up to $120,000 from their RRSPs for a down payment. Any funds you wish to withdraw must have been in the RRSP for at least 90 days.
  • Key 2025 Update: A major recent improvement to the plan applies to withdrawals made between January 1, 2022, and December 31, 2025. For these withdrawals, the 15-year repayment period now begins in the fifth year after the withdrawal, giving you much-needed financial breathing room in your first few years of homeownership.

3. The Closing Cost Killer: Land Transfer Tax (LTT) Rebates

Land Transfer Tax is a significant closing cost that all Ontario buyers face. However, first-timers get a substantial break.

  • Provincial Rebate: The Government of Ontario offers a rebate of up to $4,000 on the provincial LTT. This completely eliminates the tax on homes purchased for $368,000 or less. For homes priced above that, you receive the maximum $4,000 credit.
  • Toronto Municipal Rebate: If you are buying within the City of Toronto, you are subject to an additional Municipal Land Transfer Tax. The city offers its own first-time buyer rebate of up to $4,475.
  • Combined Savings: For a first-time buyer in Toronto, these two rebates can be combined for a total potential savings of $8,475, a massive reduction in your closing costs.

4. The Post-Purchase Bonus: The Home Buyers’ Amount

Think of this as a “welcome home” gift from the federal government that you receive when you file your taxes.

  • How it Works: Officially called the Home Buyers’ Amount, this is a non-refundable tax credit. It allows you to claim a $10,000 amount on your personal tax return for the year you purchase your home.
  • The Numbers: This $10,000 claim translates into a direct tax rebate of up to $1,500. While not a huge sum, it’s a welcome financial boost in your first year of homeownership.

5. Big Savings for New Construction Buyers: GST/HST Rebates

If you’re buying a newly built home from a builder, there are specific rebates to help offset the Harmonized Sales Tax (HST).

  • GST/HST New Housing Rebate: There is a standard rebate that allows buyers of new homes to recover a portion of the 5% federal part (GST) and the 8% provincial part (PST) of the HST. The rules can be complex and depend on the purchase price.
  • NEW First-Time Home Buyers’ GST Rebate: A significant new program was introduced for purchase agreements signed after May 26, 2025. This temporary rebate effectively eliminates the 5% federal portion of the HST on new homes valued up to $1 million, with a partial rebate for homes valued between $1 million and $1.5 million. This can result in a rebate of up to $50,000, providing a massive incentive for first-time buyers considering new construction.

A Note on a Discontinued Program

To avoid confusion, it is important to note that the First-Time Home Buyer Incentive, a shared-equity mortgage program offered by the federal government, was discontinued in March 2024 and is no longer accepting new applicants.

By taking full advantage of these programs, you can significantly reduce the financial barriers to homeownership. The combined power of the FHSA, HBP, tax rebates, and credits can make your dream a reality sooner than you think. When you’re ready to start the home buying process, be sure to discuss these programs with your mortgage advisor and your real estate agent to build a comprehensive and winning strategy.