First time home buyers in Ontario

If you’re planning to buy your first home in Canada, there’s one thing you need to understand early:

Buying your first home is less about timing the market and more about understanding the system.

The Government of Canada offers several tax incentives and programs designed to help first-time home buyers. These programs are administered by the Canada Revenue Agency (CRA) and other federal agencies.

The problem?

Most of this information is buried in long government pages that people simply don’t read.

In this article, I’ll break down only the essentials, from a real buyer’s perspective, so you can understand what actually matters before purchasing your first home.

The Most Important Rule: No Tax Filing = No Benefits

Before talking about any incentives, there’s one critical requirement:

👉 If you do not file your income tax return, you are not eligible for any first-time home buyer benefits.

Many people think:

“I haven’t bought a home yet, so I’ll worry about this later.”

That mindset causes people to miss out on FHSA room, RRSP strategies, and tax credits they could have been building years in advance.

In Canada, housing incentives are designed to help you prepare to buy a home — not reward you after the fact.

Three Key Programs Every First-Time Buyer Should Know

① FHSA – First Home Savings Account

This is currently the most powerful tool available for first-time home buyers.

FHSA basics:

• A registered account created specifically for your first home

• Contributions are tax-deductible

• Withdrawals for a qualifying first home are tax-free

• Investment growth inside the account is not taxed

In simple terms, FHSA combines:

• The tax deduction of an RRSP

• The tax-free withdrawal of a TFSA

all for the purpose of buying your first home.

Although FHSA may look similar to an RRSP on the surface, the purpose and strategy are completely different.

② RRSP Home Buyers’ Plan (HBP)

This is a more familiar program for many buyers.

• You can withdraw up to $35,000 from your RRSP

• The withdrawal is not taxed at the time of purchase

• The amount must be repaid over time according to CRA rules

Here’s the key point many buyers miss:

👉 FHSA and RRSP (HBP) can be used together.

If you only use one and ignore the other, your down payment strategy may be significantly weaker than it needs to be.

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

• A non-refundable tax credit of up to $1,500

• Available when you purchase your first qualifying home

While the amount isn’t massive, it can help offset:

• Legal fees

• Closing costs

• Moving expenses

It’s a small but useful piece of the overall strategy.

Buying a New Build or Pre-Construction? Don’t Skip This

If you’re purchasing a newly built home or a pre-construction condo, there’s another incentive to review:

GST/HST New Housing Rebate

• Available for qualifying new home purchases

• Can reduce upfront costs

• Eligibility depends on purchase structure and use

Pre-construction buyers in particular should confirm whether this rebate applies before signing, not after.

4. The Most Common Mistake First-Time Buyers Make

❌ “I’ll look into these benefits when I’m ready to buy.”

⭕ The benefits go to those who prepare early.

These programs are not bonuses for people who already own a home.

They are tools designed to help you get there.

When you open your FHSA, how consistently you file taxes, and how you coordinate FHSA with RRSP strategies can dramatically change your purchasing power — even if the home price is the same.

First Homes Are About Structure, Not Timing

Buying your first home isn’t just about asking:

“Should I buy now or wait?”

It’s about:

• Understanding the available government programs

• Using them together strategically

• Preparing years before the purchase happens

Government incentives matter less individually -and far more in how they are combined.

That’s where informed buyers gain an advantage.

If you need my help please email me chloe.jee@century21.ca or leave the message 416 333 6523

Sources

• Canada Revenue Agency (CRA)

• Financial Literacy Month, November 6, 2023