First-time buyer tax savings, 2026

1. The FHSA: the best account you can open

The First Home Savings Account gives you up to $8,000 of room a year, to a lifetime maximum of $40,000 in contributions. It is the only account that is deductible going in, like an RRSP, AND tax free coming out for a qualifying home, like a TFSA, and that includes the growth. If you contribute $40,000 and it grows to $52,500, you withdraw the whole $52,500 tax free. There is no repayment, and if you never buy, it rolls into your RRSP.

The one rule that trips people up: your room only starts building once you open the account. Open it early, even with $1. Unused room carries forward up to $8,000, so you could have up to $16,000 of room in a single year, but only if the account was already open.

2. The RRSP Home Buyers' Plan

The Home Buyers' Plan lets each eligible person withdraw up to $60,000 from their RRSP, tax free, toward a first home. It is a loan from yourself: you repay it into your RRSP over up to 15 years, starting the second year after you withdraw.

The FHSA and the HBP stack on the same home. That is up to about $100,000 per person before any growth, and more with growth. A couple who both have both accounts can reach well past $200,000.

3. The Home Buyers' Amount

This is a federal tax credit. You claim up to $10,000 on line 31270 of your return, and because it is a 15% non-refundable credit, it is worth up to $1,500 off your federal tax. If you buy with someone, you split the $10,000, so together the most you get is still $1,500.

Here is the honest part: this is not closing cash. It shows up as a smaller tax bill when you file next spring. Lovely to have, but do not count it toward your down payment or your closing costs.

4. Land transfer tax rebates

When you buy, you pay land transfer tax. As a first-time buyer, Ontario refunds up to $4,000 of it, which fully covers the tax on a home up to about $368,000. In the City of Toronto there is a second, municipal land transfer tax, and a matching first-time rebate of up to $4,475.

5. New home GST and HST relief, the big one

This is the headline opportunity in 2026, and it applies to new builds only, never a resale. On a resale home there is no GST or HST to get back, so skip this section if you are buying resale.

On a new home you pay 13% HST, made up of 5% federal GST and 8% Ontario. In 2026 there are programs that can give most or all of it back:

• The federal First-Time Home Buyers' GST Rebate gives back 100% of the 5% GST, up to $50,000, on new homes up to $1 million. Between $1 million and $1.5 million it phases out, roughly $10,000 less for every $100,000 over $1 million, and reaches zero at $1.5 million. Your agreement must be signed on or after March 20, 2025 and before 2031, and it is once per lifetime.
• The Ontario first-time buyers' HST rebate mirrors it on the 8% provincial side, up to $80,000. It is live and retroactive to March 20, 2025.
• A temporary Ontario enhanced rebate, open to ALL buyers, not only first-time ones, for agreements signed April 1, 2026 to March 31, 2027. It rebates the 8% (up to $80,000) plus an Ontario-funded 5% top-up (up to $50,000). Construction must begin by the end of 2028 and be substantially complete by the end of 2031.

Put together, the combined relief works out like this: up to $1 million you can get the full 13% back, to a maximum of $130,000 and never more than the HST you actually paid. From $1 million to $1.5 million it holds flat at $130,000. From $1.5 million to $1.85 million it tapers from $130,000 down to $24,000, and above $1.85 million only the older $24,000 rebate remains.

One more honest note on why this matters: on a $1 million new home, missing the March 31, 2027 signing window can mean giving up as much as around $106,000 of relief. That is not a reason to rush a bad decision, but it is a real deadline worth knowing about.

The centerpiece: when does the money actually arrive?

This is the part almost nobody explains, and it is the most useful thing in this guide. Each program helps, but they reach you at very different times. Only two of them are money you can put toward your down payment.

The bottom line: only your FHSA and HBP are down-payment money. Everything else either lowers a bill at closing or shows up later. Never treat a future tax credit as cash you have on closing day.

Your action checklist

• Confirm each buyer's first-time status, program by program, the definitions differ slightly.
• Open your FHSA early, even empty, so the room starts building.
• Check your available room before you deposit, so you do not over-contribute.
• De-risk the investments inside these accounts as your purchase gets close, you do not want a dip right before you need the cash.
• Mind the 89-day rule on any RRSP top-up for the HBP.
• Let your lawyer confirm and apply the land transfer tax rebates at closing.
• For a new build, settle in writing who claims the HST rebates, and keep every document.

The common mistakes

• Calling the land transfer tax rebate an exemption, it is not, you still pay the rest.
• Assuming spouses share FHSA or RRSP room, they do not, each person has their own.
• Assuming the new home rebates apply to a resale, they never do.
• Counting estimated refunds as guaranteed closing cash, only bucket one is that.

Have a question while you read? I am one message away.

Jay Patel

REALTOR®

Get Home Realty Inc., Brokerage · Greater Toronto Area

WhatsApp226 280 1694 Emailjaypatel@gethomerealty.ca Instagram@jayp.realestate FacebookJay Patel