Buying your first home is one of the biggest financial milestones many Canadians will ever make. To help first-time buyers bridge the gap between renting and owning, the Government of Canada offers a suite of incentives, tax credits, and savings programs designed to lower upfront costs and make homeownership more attainable in 2026. Here’s what first-time buyers need to know.
1. First Home Savings Account (FHSA)
The First Home Savings Account is one of the most powerful tools available for prospective first-time buyers. This registered account lets you save for a down payment with double tax advantages:
Tax-deductible contributions, similar to an RRSP
Tax-free withdrawals when used to buy your first home
You can contribute up to $8,000 per year, to a lifetime maximum of $40,000. Couples can each open an FHSA, potentially saving up to $80,000 together. Unlike RRSP withdrawals, FHSA funds used for a qualifying home purchase do not need to be repaid. (Canada)
2. Home Buyers’ Plan (HBP)
The Home Buyers’ Plan lets eligible first-time buyers withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) tax-free, to put towards a home purchase. If you’re buying with a partner, each of you can withdraw up to $60,000, potentially accessing up to $120,000.
The withdrawal must be paid back into your RRSP over a 15-year period to avoid tax consequences. While HBP isn’t a grant — it’s more like interest-free borrowing — it can significantly ease the cash burden for your down payment. (Ratehub.ca)
3. First-Time Home Buyers’ Tax Credit (HBTC)
The First-Time Home Buyers’ Tax Credit offers a non-refundable tax credit of up to $10,000, which translates to a tax relief of up to $1,500 on your federal tax bill in the year you buy your home.
This credit helps offset closing costs such as legal fees and inspections, and can be claimed when you file your income tax return. (Canada)
4. GST/HST Rebates and Relief
If you’re buying a newly constructed home or substantially renovating a property, you may be eligible to recover part — or in some cases all — of the Goods and Services Tax (GST) paid on the purchase.
Under the proposed federal GST relief measures introduced in 2025, first-time buyers purchasing new homes priced up to $1 million could see the GST eliminated, with a tapering rebate on homes up to $1.5 million. This could mean savings of up to $50,000 or more, depending on the value of the home. (Reddit)
Note: Some of these relief measures are still dependent on legislation and implementation timelines, so it’s important to check the latest status with Canada Revenue Agency or a real estate professional.
5. Provincial and Municipal Incentives
Beyond federal programs, many provinces and cities provide land transfer tax rebates or exemptions for first-time buyers. Examples include:
Ontario offers a land transfer tax refund up to $4,000 for first-time buyers. In Toronto, an additional municipal rebate up to $4,475 may be available. (WOWA)
Other provinces like British Columbia and Prince Edward Island also offer varying rebates on provincial land transfer taxes.
These rebates can significantly reduce the closing costs associated with purchasing a home.
6. Longer Mortgage Amortization Options for New Builds
As part of recent federal measures, first-time homebuyers of newly built homes may qualify for extended mortgage amortization periods (up to 30 years) starting in 2024, helping lower monthly payments and improve affordability for buyers who may otherwise struggle with higher monthly costs. (Canada)
What’s Changed for 2026?
One major change affecting first-time buyers is that the original First-Time Home Buyer Incentive (FTHBI) — a shared-equity program where the government provided 5% or 10% of the home’s value in exchange for shared equity — was discontinued in 2024 and is no longer available to new applicants. (Housing Infrastructure Canada)
However, the shift has led to new tax-relief measures, expanded FHSA limits, and other targeted programs to support buyers more effectively.
How These Incentives Work Together
Smart homebuyers often combine multiple programs to maximize savings. For example:
Use the FHSA to save tax-efficiently for your down payment
Withdraw from your RRSP using HBP for additional down payment funds
Claim the HBTC to offset closing costs
Apply for GST/HST rebates and any applicable provincial land transfer tax rebates
Together, these incentives can reduce both the upfront cash you need and the taxes you pay — helping first-time buyers take their first step onto the property ladder with greater confidence.
Final Thoughts
Though housing markets remain competitive in Canada, federal and provincial incentives in 2026 continue to offer meaningful support for first-time homebuyers. Understanding and planning around these programs can save you thousands of dollars and make homeownership significantly more attainable.
Before applying or making financial decisions, always confirm current eligibility requirements with official government sources or consult with a real estate professional or financial advisor.
