SUMMER MOVE-IN SPECIAL — For a limited time, secure incredible offers on select Cantiro quick possession homes!
April 21, 2023

Canadian First Time Home Buyer Programs, Incentives and Grants

By Cantiro Homes
first time home buyers holding the keys to their first home

Buying a home for the first time is both exciting and daunting. It can be a struggle to save up a down payment, budget for mortgage payments, build a contingency fund, and handle extra costs such as buying furniture and moving.

Good news! There are many first-time home buyer benefits in Canada to help with these costs. As a first-time homebuyer, you may be eligible for several programs, incentives, tax credits, and rebates, including the new First Home Savings Account (FHSA). Here are six ways to help make the step into homeownership more affordable:

1.         Home Buyer’s Plan (HBP)

The first program we want to introduce is The Home Buyer’s Plan. This is a federal program that allows first-time homebuyers to withdraw up to $35,000 from their RRSPs tax-free to use as a down payment on a home. Since this is considered a loan, the amount borrowed must be repaid over a 15-year period. If you are purchasing the home with another first time home buyer, they may also use the Home Buyer’s Plan.

To qualify:

    • You must be considered a first-time home buyer.
    • You must have a written agreement to buy or build a qualifying home, either for yourself or for a related person with a disability.
    • You must be a resident of Canada when you withdraw funds from your RRSPs under the HBP and up to the time a qualifying home is bought or built.
    • You must intend to occupy the qualifying home as your principal place of residence within one year after buying or building it.
    • In all cases, if you have previously participated in the HBP, you may be able to do so again if your repayable HBP balance on January 1st of the year of the withdrawal is zero and you meet all the other HBP eligibility conditions.

The benefits:

    • The HBP allows first-time homebuyers to use their RRSP savings to help fund their down payment, which can reduce the financial burden of purchasing a home. This can be especially beneficial for those who may not have enough savings to cover the entire down payment or may not qualify for a mortgage without a larger down payment.
    • Unlike regular RRSP withdrawals, the HBP allows individuals to withdraw up to $35,000 from their RRSP tax-free, without incurring any penalties. This can make it a more attractive option for first-time homebuyers who need to access their savings but don’t want to pay extra fees or taxes.
    • The HBP also allows individuals to repay the amount they withdrew from their RRSP over a period of up to 15 years. This can give homebuyers more flexibility in their financial planning, as they can choose to repay the amount they withdrew at a pace that works for them. Additionally, by repaying the withdrawn amount back into their RRSP, individuals can continue to save for their retirement.

2.         First Home Savings Account (FHSA)

The next program is the First Home Savings Account (FHSA). This is a new registered account allowing you, as a prospective first-time home buyer, to save for your first home tax-free. Through the plan, you can contribute up to $8,000 per year, with a lifetime limit of $40,000.

An FHSA combines the features of a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA) . Like an RRSP, contributions would be tax-deductible and qualifying withdrawals to purchase a first home would be non-taxable, like a TFSA. However, with an FHSA and unlike the Home Buyers’ Plan, the funds do not need to be paid back.

The account can stay open for 15 years or until the end of the year you turn 71, or at the end of the year following the year in which you make a qualifying withdrawal from an FHSA for the first home purchase, whichever comes first.

To qualify:

The benefits:

    • The FHSA account can be used to invest in Stocks, ETFs, options, and much more just like a TFSA or RRSP.
    • Your investments can grow tax-free within the account, making it an ideal choice to avoid capital gains and/or income tax on your investments while saving for a new home.
    • If the money is used towards the qualifying purchase or build or your first home, it can be withdrawn tax-free.

3.  First Time Home Buyer’s Tax Credit (HBTC)

This is a federal non-refundable tax credit that allows first-time homebuyers to claim up to $10,000 of the costs associated with purchasing a home. If you’re buying a home for the first time, claiming the first-time homebuyer credit can land you a total tax rebate of $1,500 (it was $750 prior to the 2022 Federal Budget being approved).

To qualify:

    • First-time home buyers who acquire a qualifying home can claim a non-refundable tax credit of up to $750 . The value of the HBTC is calculated by multiplying $5,000 by the lowest personal income tax rate (15% in 2022).

The benefits:

    • The HBTC puts money back in your pocket.

4.        First Time Home Buyer Incentive

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens. It is a shared-equity mortgage with the Government of Canada, which offers 5% or 10% for a first-time buyer’s purchase of a newly constructed home, 5% for a first-time buyer’s purchase of a resale (existing) home or 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home.

The shared equity component of the incentive means that the government shares in both the upside and downside of the property value, up to a maximum gain or loss equal to 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment. 

To qualify:

    • Your total annual qualifying income doesn’t exceed $120,000 ($150,000 if the home you are purchasing is in Toronto, Vancouver, or Victoria).
    • Your total borrowing is no more than 4 times your qualifying income (4.5 times if the home you are purchasing is in Toronto, Vancouver or Victoria).
    • You or your partner are a first-time homebuyer.
    • You are a Canadian citizen, permanent resident or non-permanent resident authorized to work in Canada.
    • You meet the minimum down payment requirements with traditional funds (savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member).

The benefits:

    • The FTHBI reduces the amount of money a first-time home buyer needs to borrow for their mortgage, which can result in lower monthly mortgage payments. This can make owning a home more affordable for those who may struggle to make ends meet.
    • The FTHBI program allows first-time home buyers to put down a lower down payment than they would normally need to. This can make it easier for individuals or families to save for a down payment and purchase a home sooner.
    • The FTHBI program allows the government to share in the equity of the home with the homeowner. This means that when the homeowner sells the property, they will need to repay the government a portion of the appreciated value. However, this shared equity also means that first-time home buyers can afford to purchase a more expensive home than they may have been able to without the program.

5.        GST/HST New Housing Rebate

You may be eligible for a GST/HST New Housing Rebate if you purchase a newly constructed or substantially renovated home. For homes under $450,000.00, you may qualify for a GST rebate of up to $6,300.00. The rebate amount equals 36% of the GST on homes up to $350k or a flat rate of $6,300.00 on homes priced between $350k and $450k. This rebate isn’t specifically for first-time home buyers, however, it’s another way to reduce costs on your new home.

How can you claim the new housing rebate?

To apply for the rebate, you will need to complete and submit a form from the government website within 2 years after the construction date.  On this form, you will need to provide information about yourself and your home.

You will also need to include a copy of your sales contract, a copy of your settlement statement, and other documents depending on your situation.

If you’re claiming a rebate for a new home that you bought from a builder, you may be able to have the builder apply for the rebate on your behalf. The CRA will review your application and notify you of their decision. If you are approved for the rebate, you will receive a cheque in the mail. 

To qualify:

    • Eligibility varies based on the offer and category being accessed.  For complete program details, visit the website.
    • The GST/HST New Housing Rebate allows an individual to recover some of the GST or the federal part of the HST paid for a new or substantially renovated house that is for use as the individual’s, or their relation’s, primary place of residence, when all of the other conditions are met.

The benefits:

    • The rebate program provides eligible applicants with financial relief by allowing them to recover some of the GST/HST paid on the purchase or construction of their new home. This rebate can be worth thousands of dollars depending on the amount of tax paid.
    • The rebate program can make homeownership more affordable for some Canadians by reducing the amount of GST/HST they need to pay on their home purchase or renovation.

6. CMHC Eco Plus

The CMHC (Canada Mortgage and Housing Corporation) Eco Plus program offered by the Canadian government to encourage the construction of energy-efficient homes. Under this program, homebuyers who purchase or build a new home that meets certain energy efficiency standards may be eligible for a partial refund of their mortgage insurance premiums through CMHC. The refund can range from 15% to 25% of the mortgage insurance premiums paid. Again, this refund isn’t specifically for first-time home buyers, however, it’s another way to reduce costs on your new home.


    • Properties awarded an eligible certificate.
    • Properties with tonnes/year GHG rating that fall within the top 15% of the housing stock in lowest GHG emissions rating.
    • Properties with a gigajoules/year rating of at least 20% lower than “A Typical New House”.

The benefits:

    • By making energy-efficient upgrades to your home, you can save on your monthly energy bills. This means you’ll have more money in your pocket each month, which you can use to pay down your mortgage or invest in other areas of your life.
    • Energy-efficient upgrades can increase the value of your home. This is because energy-efficient homes are in high demand, and buyers are willing to pay more for them. This means that you may be able to sell your home for a higher price in the future.
    • Energy-efficient homes use less energy, which means they produce fewer greenhouse gas emissions. This is good for the environment, as it helps to reduce the impact of climate change. By participating in the Eco Plus program, you’ll be doing your part to help protect the planet.

Which Home Buyer Incentive is right for you?

In summary, there are many amazing programs, incentives, tax credits and rebates to help first time home buyers step into homeownership in Canada. Our team is here to assist you throughout the homebuying process and we will put in touch with our preferred lenders to help you get started with prequalification. In the meantime, here are some tools to assist with your online research: