Key takeaways
- Ontario’s land transfer tax refund is up to $4,000; Toronto offers a separate municipal rebate of up to $4,475 for eligible purchases.
- An FHSA and the Home Buyers’ Plan can help fund the same qualifying purchase if you meet both sets of rules.
- New-home GST/HST rebates changed in 2026. Check the agreement date, price and intended occupancy before budgeting for them.
- “First-time buyer” means something different under different programs, particularly where a spouse previously owned a home.
Which programs help with the down payment?
The First Home Savings Account, or FHSA, combines deductible contributions with tax-free qualifying withdrawals. Your participation room begins when you first open an FHSA. The annual room starts at $8,000, subject to the carry-forward rules, and the lifetime contribution limit is $40,000. A qualifying withdrawal does not have to be repaid. Opening an account and taking money out have separate conditions. [1]
The Home Buyers’ Plan, or HBP, lets an eligible person withdraw up to $60,000 from their RRSP for a qualifying home. HBP amounts generally must be repaid over 15 years, and an annual repayment shortfall is generally included in income. For first withdrawals made in 2026–2028, repayments start in the fifth year after the withdrawal year. A first withdrawal in 2026 therefore has a first repayment year of 2031. [2]
You may use both programs for the same home. Arrange the withdrawals through your financial institution early enough for the money to clear before your lawyer’s funding deadline. The account balance is only useful at closing if it can actually be released on time.
What land transfer tax refunds are available?
Ontario provides an eligible first-time buyer with a refund of up to $4,000 of provincial land transfer tax. The buyer generally must be at least 18, meet the citizenship or permanent-resident requirements, never have owned an eligible home anywhere in the world, and occupy the property as a principal residence within nine months. Spousal ownership matters too. [3]
Toronto has a separate rebate of up to $4,475. It applies to eligible homes within the City of Toronto, including qualifying resale and newly built homes. A home in another GTA municipality does not attract Toronto’s municipal tax simply because it is near Toronto. [4]
The two maximums can total $8,475 on an eligible Toronto purchase, but your actual relief depends on the tax payable, the ownership interests and each purchaser’s eligibility. Your lawyer can usually claim an available refund on registration using the required declarations. If it is claimed afterward, the application deadlines and supporting-document requirements still apply.
Is there a federal home buyers’ tax credit?
Eligible buyers can claim the home buyers’ amount on their income tax return. The maximum claim amount is $10,000, which is used to calculate a non-refundable tax credit. It is not a $10,000 cash payment and does not supply closing funds. Where eligible people share the claim, their combined claim cannot exceed the permitted maximum. [5]
Keep the purchase documents and give the closing date and ownership details to your tax preparer. This credit has its own first-time-buyer and qualifying-home rules, including provisions for certain persons with disabilities.
What if I am buying a newly built home?
Separate GST/HST programs may apply. The federal first-time home buyers’ rebate can refund the federal tax on qualifying new homes valued up to $1 million, with reduced relief below $1.5 million. Ontario also has a first-time-buyer rebate for the provincial portion of HST. Agreement dates and occupancy requirements are central to eligibility. [6]
There is also temporary Ontario enhanced new-housing relief for qualifying agreements made from April 1, 2026 through March 31, 2027. It is not restricted to first-time buyers. Its conditions and interaction with the other rebates must be checked separately. You cannot add overlapping rebate maximums together as if they were independent payments. [7]
Ask your lawyer to confirm whether the advertised price already credits an assumed rebate. If you do not qualify, the agreement may require you to pay the builder more on closing.
Does my spouse’s previous ownership disqualify me?
It can, but the answer depends on the program. Ontario and Toronto land transfer tax relief generally look at whether your spouse owned a home while you were spouses, alongside your own ownership history. FHSA, HBP and GST/HST rules use their own tests and time periods.
Tell your lawyer and tax adviser about property owned outside Canada, inherited interests, joint ownership and your spouse’s history. Do not answer every application using a single assumption that you are a first-time buyer.
How should I plan the claims before closing?
Make a short list of the programs you expect to use, the amount available and when you expect to receive it. Separate money available before closing from refunds or credits that arrive later. Give your lawyer accurate ownership and immigration information, and have your financial institution confirm withdrawal processing times. Budget using amounts that have been checked for your transaction.
About the author — Kubeskaran Navaratnam
Kubeskaran Navaratnam is the Managing Partner of iClosed and a lawyer licensed by the Law Society of Ontario (LSO #60539H, licensed since 2011). His practice is Ontario residential real estate, acting for buyers, sellers and lenders on resale, new-build and condominium closings across the Greater Toronto Area. His Law Society record can be verified at https://lsodirectory.lso.ca/en-US/licensee-detail/?lawsocietynumber=60539H. This article is general information about Ontario law and practice, not legal advice. It does not create a lawyer-client relationship. For advice on your own transaction, speak with a licensed Ontario real estate lawyer.
Sources
- CRA — First Home Savings Account and participation limits. — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html ; https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/contributing-your-fhsa.html
- CRA — The Home Buyers’ Plan. — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
- Ontario — Land transfer tax refunds for first-time homebuyers. — https://www.ontario.ca/document/land-transfer-tax/land-transfer-tax-refunds-first-time-homebuyers
- City of Toronto — Municipal land transfer tax rebate opportunities. — https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/municipal-land-transfer-tax-mltt-rebate-opportunities/
- 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
- CRA — First-time home buyers’ 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
- CRA — Ontario Enhanced New Housing Rebate. — https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/notice346/ontario-enhanced-new-housing-rebate.html
This article provides general information about Ontario law and closing practice as of October 26, 2026. It is not legal or tax advice and does not create a lawyer-client relationship. Your agreement of purchase and sale, your lender’s instructions and your own circumstances control what applies to you. Rates, thresholds and rules change — confirm current figures before relying on them.