Between a land transfer tax rebate, a First Home Savings Account, and the RRSP Home Buyers' Plan, a first-time buyer in Ontario has access to more government support than almost any other year in recent memory — but the programs are scattered across three different government websites, each with its own rules, limits, and repayment conditions. Here's what each one actually does, what it's worth in real dollars, and how they fit together for a typical Ottawa purchase.
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The Three Programs at a Glance
Land Transfer Tax Refund
Up to $4,000- Applied at closing by your lawyer
- No repayment — it's a rebate
- Must claim within 18 months
First Home Savings Account (FHSA)
$40,000 lifetime- $8,000/year contribution limit
- Contributions are tax-deductible
- Withdrawals for a home: tax-free
- No repayment required, ever
Home Buyers' Plan (HBP)
Up to $60,000- Withdraw from existing RRSP
- Tax-free at withdrawal, if repaid
- Repaid over 15 years
- Repayment deferred to year 5
Land Transfer Tax Rebate: Up to $4,000 Back
Every property purchase in Ontario triggers land transfer tax, calculated on a sliding scale based on the purchase price. First-time buyers can get up to $4,000 of that tax refunded — and in practice, your real estate lawyer applies it directly at closing, so most buyers never see the full tax bill at all, only the net amount owing.
To qualify, you need to meet all of the following:
- You're at least 18 years old
- You're a Canadian citizen or permanent resident
- You've never owned a home, or an interest in a home, anywhere in the world — and if you're married, your spouse hasn't either while married to you
- You move into the home as your principal residence within nine months of closing
If you miss claiming it at closing, you have 18 months from the registration date to apply for the refund directly.
| Purchase price portion | Ontario LTT rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,001 – $250,000 | 1.0% |
| $250,001 – $400,000 | 1.5% |
| $400,001 – $2,000,000 | 2.0% |
| Over $2,000,000 (single-family) | 2.5% |
FHSA: Tax-Deductible In, Tax-Free Out
The First Home Savings Account, launched in 2023, is the closest thing to a "no catch" incentive in this list. You can contribute up to $8,000 per year, up to a $40,000 lifetime limit. Contributions are tax-deductible the same way RRSP contributions are — they reduce your taxable income in the year you contribute — and when you withdraw the money for a qualifying first home purchase, it comes out completely tax-free. Growth inside the account isn't taxed either.
If you don't use the full $8,000 room in a given year, you can carry forward up to $8,000 of unused room into the following year — so a buyer who opens an FHSA and skips a year could put in up to $16,000 the next year. Unlike the Home Buyers' Plan, there's no repayment obligation. The money is simply yours.
RRSP Home Buyers' Plan: Borrow From Your Own Retirement Savings
The Home Buyers' Plan lets a first-time buyer withdraw up to $60,000 from their RRSP, tax-free, to put toward a home — provided it gets repaid. Unlike the FHSA, this isn't free money; it's an interest-free loan to yourself that has to go back into your RRSP over 15 years, or the unpaid portion gets added to your taxable income for that year.
On repayment timing: normally, HBP repayments start the second year after your withdrawal. Right now, that's been pushed back — withdrawals made between 2022 and 2028 don't need to start repayment until the fifth year after withdrawal, giving buyers several years of breathing room. This is a temporary relief measure, so it's worth confirming the current rules with your accountant or the CRA directly before you plan around it.
Bonus: The Home Buyers' Tax Credit
One more program worth knowing: the Home Buyers' Amount lets a first-time buyer claim $10,000 on their tax return for the year of purchase, which works out to roughly $1,500 back at the 15% federal credit rate. It's not a cheque — it's a reduction in the tax you owe — but it stacks on top of everything else here at no extra effort beyond checking a box on your return.
FHSA vs. Home Buyers' Plan: Which Should You Use First?
Most buyers who have access to both end up using them together rather than choosing one — but if you're deciding where to prioritize new savings, the trade-offs are genuinely different.
First Home Savings Account
Advantages- Never has to be repaid
- Tax-deductible contributions and tax-free withdrawals
- Unused room carries forward one year
- Capped at $40,000 lifetime — you have to actually save it first
- Must be closed within 15 years of opening or by age 71
Home Buyers' Plan
Advantages- Access up to $60,000 immediately if already in an RRSP
- No new saving required if RRSP room is already used
- Can be combined with a spouse's HBP for up to $120,000 combined
- Must be repaid over 15 years or it becomes taxable income
- Withdraws from retirement savings, delaying their growth
- Repayment timelines shifting with temporary relief rules
Comparing All Four Programs
| Program | Maximum amount | Repayment? | Best for |
|---|---|---|---|
| Land Transfer Tax Rebate | $4,000 | No — it's a rebate | Every eligible first-time buyer; applied automatically at closing |
| First Home Savings Account | $40,000 lifetime | No | Buyers with a few years of runway to save before purchasing |
| RRSP Home Buyers' Plan | $60,000 per person | Yes — over 15 years | Buyers who already have RRSP savings built up |
| Home Buyers' Tax Credit | ~$1,500 (15% of $10,000) | No | Every eligible first-time buyer; claimed at tax time |
A Realistic Example: Buying a $650,000 Home in Ottawa
Land Transfer Tax: Approximately $8,975 on a $650,000 purchase, reduced by the $4,000 rebate to roughly $4,975 net owing at closing.
FHSA: If each partner opened an account two years before buying and maxed it out, that's up to $32,000 combined ($16,000 each) available completely tax-free, with no repayment ever required.
Home Buyers' Plan: If both partners also have RRSP savings, they could withdraw up to $120,000 combined ($60,000 each) — though every dollar of that needs to be repaid over the following 15 years.
Home Buyers' Tax Credit: Roughly $1,500 back at tax time; check current eligibility, as typically only one claim per couple applies in practice.
Between the rebate, the FHSA, and a portion of the HBP, it's realistic for a two-income first-time buyer household to bring a meaningful down payment to the table — the main variable is simply how much of it comes with a 15-year repayment clock attached.
Frequently Asked Questions
Yes. There's no rule preventing a buyer from using both on the same purchase — many buyers use the FHSA for money they've saved specifically for a home, and the HBP to draw on RRSP savings they built up for other reasons. Using both maximizes the total amount available at closing.
No. Unlike the Home Buyers' Plan, FHSA withdrawals for a qualifying home purchase are never repaid. The tax-deductible contribution and the tax-free withdrawal are both permanent — it's one of the few programs in the Canadian tax system that gives you a deduction going in and no tax coming out.
For the land transfer tax rebate, if your spouse owned a home at any point while married to you, you're both disqualified from the rebate — even if you personally have never owned property. The FHSA and Home Buyers' Plan each have their own, separate first-time buyer definitions, so it's worth checking each program individually rather than assuming the same rule applies across all three.
The land transfer tax rebate must be claimed within 18 months of closing. The FHSA must be used, transferred to an RRSP, or closed within 15 years of opening, or by the end of the year you turn 71. The Home Buyers' Plan has no purchase deadline, but the repayment clock starts once you withdraw.
Normally, repayments begin the second year after your withdrawal. However, withdrawals made between 2022 and 2028 qualify for a temporary deferral — repayment doesn't start until the fifth year after the withdrawal. This is a temporary relief measure; confirm the current rules with your accountant or the CRA before planning around it.
This is general information, not personalized tax or financial advice. Program rules, limits, and repayment timelines can change, and your own eligibility depends on your specific situation. Confirm current details with the CRA, Ontario's Ministry of Finance, or your accountant before relying on any of these numbers.
Not Sure Which Programs You Qualify For?
Between the rebate, the FHSA, and the Home Buyers' Plan, most first-time buyers are leaving money on the table simply because nobody laid out all three in one place. We can walk you through what applies to your situation before you make an offer.
