Personal Tax

Ontario First-Time Home Buyer Rebates 2026: Traps to Avoid

By July 27, 2026 No Comments
First-Time Home Buyer RebatesFirst-Time Home Buyer Rebates
Disclaimer. This article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.

Quick Answer

  1. The 2026 Ontario stack includes six programs: the First Home Savings Account (FHSA), the Home Buyers’ Plan (HBP), the First-Time Home Buyers’ Tax Credit (HBTC), the Ontario Land Transfer Tax refund, the Toronto Municipal Land Transfer Tax rebate (Toronto only), and the new First-Time Home Buyers’ GST/HST Rebate on new-build homes.
  2. Federal savings alone can reach $50,000 on a qualifying new build under $1 million, and the HBP adds up to $60,000 tax-free RRSP access per buyer.
  3. Eligibility hinges on CRA rules: the buyer, and in most cases their spouse, must not have owned a home they lived in during the current calendar year or any of the four preceding calendar years.
  4. A single documentation error can eliminate one or more benefits, so the stacking sequence matters more than any individual program.

Why 2026 Is Different for Ontario Buyers

Buying your first home in Ontario has always come with a stack of federal, provincial, and municipal programs designed to soften the blow. What changed in 2026 is that those programs got substantially bigger, and the rules for stacking them got substantially stricter.

The federal First-Time Home Buyers’ GST/HST Rebate became law on March 12, 2026, when Bill C-4 received Royal Assent. It can eliminate up to $50,000 of federal GST on a qualifying new-build home. Ontario has proposed matching this with an 8% provincial rebate that could push combined savings to $130,000 on the same purchase, though that provincial measure remains subject to enactment.

At the same time, Toronto raised its Municipal Land Transfer Tax on high-value residential properties on April 1, 2026. The changes reward careful planning and punish assumptions. Understanding what the Canadian tax shift means for homeowners and investors is the starting point.

Up to $50,000Federal FTHB GST/HST Rebate
Up to $60,000HBP RRSP access per buyer
Up to $8,475Ontario + Toronto LTT refunds
4 yearsFirst-time buyer lookback window

Pick Your Path

Direct answer. The programs you qualify for depend on three questions: are you a first-time buyer, is the home a new build or resale, and is it inside the City of Toronto? Answer those and your stack is set. Everything else is documentation.

Start with the branch that matches your purchase.

New-build under $1M

You may access the federal FTHB GST/HST Rebate (up to $50,000), the FHSA, the HBP, the HBTC, and the Ontario Land Transfer Tax refund. If the home is in Toronto, add the Toronto MLTT rebate. Ontario has also proposed a provincial 8% HST rebate; track its enactment before signing.

Resale home in Ontario

The FTHB GST/HST Rebate does not apply, because it is limited to new construction and substantial renovations. You may still qualify for the FHSA, HBP, HBTC, and Ontario LTT refund. Add the Toronto MLTT rebate if the property is inside city limits.

Buying anywhere in Toronto

Every buyer inside the city pays two land transfer taxes: the provincial one and the municipal one. First-time buyers receive separate refunds on each, typically applied at closing by your real estate lawyer.

The Six Programs Available in 2026

Direct answer. Six programs form the 2026 Ontario first-time buyer stack: the FHSA and HBP help fund your down payment, the HBTC is a $1,500 federal tax credit, the Ontario and Toronto land transfer tax refunds cover closing tax, and the FTHB GST/HST Rebate erases federal GST on new builds.

First Home Savings Account (FHSA). A registered account with tax-deductible contributions and tax-free qualifying withdrawals for a first home. Annual limit $8,000; lifetime limit $40,000. Must be closed within 15 years of opening or by the year you turn 71, whichever comes first.

Home Buyers’ Plan (HBP). Lets you withdraw up to $60,000 from your Registered Retirement Savings Plan tax-free to buy or build a qualifying home. Repay 1/15 of the amount to an RRSP each year for 15 years, starting the second year after withdrawal, and designate each repayment on Schedule 7 of your T1.

First-Time Home Buyers’ Tax Credit (HBTC). A non-refundable federal credit worth up to $1,500. Claimed on line 31270 of the federal T1 return in the year of purchase. It is not automatic.

Ontario Land Transfer Tax refund. Refunds up to $4,000 of provincial LTT for first-time buyers. Covers LTT in full on qualifying homes priced up to $368,000.

Toronto Municipal Land Transfer Tax rebate. Refunds up to $4,475 for first-time buyers inside city limits, covering MLTT in full on qualifying homes priced up to $400,000.

First-Time Home Buyers’ GST/HST Rebate. Enacted through Bill C-4 on March 12, 2026 and retroactive to purchase agreements dated on or after March 20, 2025. Eliminates federal GST on a new-build home valued up to $1 million and phases out between $1 million and $1.5 million.

For a plain-English refresher on how GST/HST changes affect Canadian wallets, see our earlier guide.

ClearWealth Accounting Advisors
Maximum savings ceiling per program (Ontario, 2026)
Federal and provincial first-time home buyer programs, ranked by dollar ceiling
ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only · Sources: CRA First-time home buyers’ GST/HST rebate; CRA Home Buyers’ Plan; Ontario Ministry of Finance; City of Toronto MLTT; 2026 Ontario Budget (proposed provincial rebate)

FHSA and HBP: Stacking Them Without Losing Either

The FHSA and HBP can be used on the same home purchase. That is confirmed under the Income Tax Act, and it is where careful sequencing produces the largest savings.

The efficient order is to max your FHSA first, then use the HBP to top up. FHSA contributions are tax-deductible in the year you make them, and qualifying withdrawals never need to be repaid. HBP withdrawals are also tax-free at the time of withdrawal but must be repaid over 15 years, starting the second year after withdrawal. Miss a year’s minimum repayment and that amount is added to your taxable income on line 12900.

Two rules quietly reduce the benefit of both accounts. First, RRSP contributions typically must sit in the account for at least 90 days before an HBP withdrawal, or the CRA can deny the deduction. Second, the FHSA generally must be opened before you sign the purchase agreement for the home you plan to buy. Contributions made after the agreement is signed may not count toward a qualifying withdrawal for that same home.

Because both accounts interact with your broader retirement strategy, coordinate the sequencing with your overall retirement planning guide rather than treating each in isolation.

ClearWealth Accounting Advisors
FHSA vs HBP: access to first-home funds
Annual and lifetime dollar ceilings across the two federal first-home accounts
Tax-deductible?
FHSA: yes, in the year contributed · HBP: was deducted when originally contributed to RRSP
Repayment?
FHSA: none on qualifying withdrawal · HBP: 1/15 per year for 15 years, on Schedule 7
Account life
FHSA: 15 years from opening or by age 71 · HBP: not an account, a program
ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only · Sources: CRA First Home Savings Account; CRA Home Buyers’ Plan

Step-by-Step Roadmap: Claim Every Rebate You Qualify For

The stack rewards early planning. Work through this sequence before you sign anything binding.

  1. 1
    Open your FHSA now.Any Canadian resident aged 18 to 71 who has not owned a home in the current or four preceding calendar years can open one. Every year the account is open builds contribution room, whether or not you contribute.
  2. 2
    Contribute to your RRSP at least 90 days before an HBP withdrawal.The 90-day rule generally prevents in-and-out RRSP transactions from producing a deduction, and the CRA can deny the deduction if it is violated.
  3. 3
    Confirm eligibility with your accountant before making an offer.Walk through the four-calendar-year lookback for both you and your spouse. A spouse who owned a home you lived in during the lookback period can disqualify you.
  4. 4
    Time the closing paperwork with your lawyer.The Ontario LTT refund and Toronto MLTT rebate are typically applied at closing when your lawyer files the Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers. Confirm this before closing day.
  5. 5
    File both rebates on your next tax return.The HBTC goes on line 31270 of your federal T1. If you took an HBP withdrawal, note the amount for your Schedule 7 repayment tracking. Coordinating this with how to prepare for tax season keeps the paperwork from slipping.
ClearWealth Accounting Advisors
$650K resale vs $650K new build (Toronto first-time buyer)
Illustrative cash-back at closing and on the next tax return, same purchase price
Resale total
$9,975
HBTC + Ontario LTT + Toronto MLTT
New-build total
$42,475
Resale stack + FTHB GST rebate ($32,500 at 5% GST on $650K)
ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only · Illustrative example only; actual rebates depend on eligibility · Sources: CRA GST190 New Housing Rebate; Ontario Ministry of Finance LTT refund; City of Toronto MLTT

Eligibility Traps and Common Mistakes

Every program on the stack has at least one condition that can quietly erase the benefit. Watch for these.

  • →Assuming resale homes qualify for the FTHB GST/HST Rebate. The rebate is limited to new construction and substantial renovations. A resale home in perfect condition does not qualify, regardless of price.
  • →Overlooking spousal ownership history. If your spouse or common-law partner owned a home you lived in during the current or four preceding calendar years, you generally do not qualify as a first-time buyer for federal programs.
  • →Missing the Schedule 7 designation on HBP repayments. RRSP contributions must be specifically designated as HBP repayments on Schedule 7 of your T1. Otherwise the CRA typically treats them as regular RRSP contributions and you still owe the repayment.
  • →Signing a new-build agreement before opening your FHSA. Contributions made after the purchase agreement is signed may not count toward a qualifying withdrawal for that home.
  • →Forgetting to occupy the home within the required window. The HBP generally requires that you occupy the home as your principal residence by October 1 of the year following withdrawal.
  • →Failing to claim the HBTC at all. Line 31270 is easy to overlook, but every eligible buyer should ensure it appears on the T1 for the purchase year.
  • →Using an outdated Toronto MLTT rate. Toronto raised MLTT on high-value residential properties on April 1, 2026, so calculators built before that date are no longer accurate.

Frequently Asked Questions

Can I use the FHSA and the Home Buyers’ Plan on the same home?

Yes. The CRA confirms both may be used for the same qualifying home purchase, provided each account’s eligibility rules are met at the time of withdrawal. FHSA qualifying withdrawals are tax-free and require no repayment. HBP withdrawals must be repaid to an RRSP over 15 years.

What counts as a first-time home buyer for the new GST/HST rebate?

Generally someone at least 18 years old, a Canadian citizen or permanent resident, who did not live in a home that they, their spouse, or their common-law partner owned during the current calendar year or any of the four preceding calendar years.

If my spouse owned a home before we got married, can I still claim first-time buyer rebates?

Sometimes. The test is whether your spouse owned a home you lived in while you were spouses. If they sold it before you became spouses and you never lived in it as their spouse, you may still qualify. Confirm your situation with an accountant.

Does the new HST rebate apply to a resale home?

No. The First-Time Home Buyers’ GST/HST Rebate applies only to new construction, substantial renovations, and certain owner-built homes. Resale homes are outside the rebate’s scope, regardless of price or the buyer’s first-time status.

How much can I withdraw from my RRSP under the Home Buyers’ Plan in 2026?

Up to $60,000 per individual since April 16, 2024. A couple where both partners qualify can each withdraw $60,000 for a combined $120,000. Repayment is 1/15 per year over 15 years, starting the second year after withdrawal.

Do I get both the Ontario and Toronto land transfer tax refunds if I buy in Toronto?

Yes. Toronto buyers pay both provincial and municipal land transfer taxes, and first-time buyers receive separate refunds on each. The Ontario refund is up to $4,000 and the Toronto rebate is up to $4,475. Your lawyer typically applies both at closing.

Where do I claim the $1,500 first-time home buyer tax credit on my tax return?

On line 31270 of your federal T1 return, in the tax year you purchased the home. The credit equals 15% of a $10,000 amount, worth up to $1,500. It is non-refundable, meaning it reduces tax owing but does not create a refund on its own.

What happens if I do not repay my HBP on time?

The amount you were supposed to repay that year is added to your taxable income on line 12900 of your T1, and you pay income tax on it. Your remaining HBP balance stays outstanding. The missed amount does not become a debt to the CRA.

Get the stack right the first time

A short planning conversation with a Canadian tax advisor before you sign a purchase agreement can protect the full stack, confirm your eligibility, and flag the paperwork your lawyer needs at closing.

Book a Consultation
This article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.

Sources & References

  1. CRA — First-time home buyers’ (FTHB) GST/HST rebate — https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate.html
  2. CRA — Who can apply for the FTHB GST/HST rebate — https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate/who-can-apply.html
  3. CRA — The Home Buyers’ Plan (HBP) — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
  4. CRA — First Home Savings Account (FHSA) — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html
  5. CRA — Line 31270 Home buyers’ amount — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html
  6. Ontario Ministry of Finance — Land Transfer Tax Refunds for First-time Homebuyers — https://www.ontario.ca/document/land-transfer-tax/refunds-first-time-homebuyers
  7. City of Toronto — Municipal Land Transfer Tax (MLTT) — https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/
  8. 2026 Ontario Budget — proposed provincial HST rebate for first-time buyers — https://budget.ontario.ca/2026/index.html