Federal Programs for All CanadiansFederal Programs for All Canadians

The federal government offers several programs designed to help first-time home buyers in Canada — from the First Home Savings Account to the RRSP Home Buyers’ Plan, tax credits, and GST/HST rebates. The former First-Time Home Buyer Incentive (shared-equity) has ended. These remaining programs can be combined (or “stacked”) to save you tens of thousands of dollars — but only if you know about them and claim them correctly. This page covers each federal program, who qualifies, and how to take advantage of them.

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First Home Savings Account (FHSA)

The FHSA is a registered savings account created specifically for first-time home buyers. It combines the best features of an RRSP and a TFSA into a single powerful savings vehicle.

Key Details

Federal program limits below reflect CRA and CMHC guidance as of July 2026:

• Annual contribution limit: $8,000 per year
• Lifetime contribution limit: $40,000
• Unused room carry-forward: Up to $8,000 of unused contribution room can be carried forward to the next year (maximum contribution in any single year is $16,000)
• Tax deduction: Contributions are tax-deductible, just like an RRSP. If you contribute $8,000 and your marginal tax rate is 30%, you save $2,400 on your taxes that year.
• Tax-free growth: Any investment gains inside the FHSA — interest, dividends, capital gains — grow completely tax-free.
• Tax-free withdrawal: When you withdraw funds for a qualifying first home purchase, you pay no tax on the withdrawal. This is the key difference from an RRSP, where withdrawals are normally taxed.
• Account lifespan: The account can remain open for up to 15 years or until you turn 71, whichever comes first. If you do not buy a home, you can transfer the balance to your RRSP without affecting your RRSP room, or withdraw it as taxable income.

Who Should Open an FHSA

Every Canadian who might buy a first home within the next 15 years should consider opening an FHSA as soon as possible — even if you can only contribute a small amount initially. The contribution room starts accumulating from the year you open the account, so opening early gives you more room later.

For a detailed breakdown of FHSA contribution strategies, investment options, and timelines, see Module 2: Saving Smart.

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RRSP Home Buyers’ Plan (HBP)

The Home Buyers’ Plan allows you to withdraw from your RRSP to buy or build a qualifying first home without paying tax on the withdrawal at the time.

Key Details

• Maximum withdrawal: $60,000 per person ($120,000 for a couple buying together)
• Tax treatment: The withdrawal is not included in your income for the year, so you pay no tax upfront.
• Repayment requirement: You must repay the withdrawn amount to your RRSP over 15 years. For first withdrawals between January 1, 2026 and December 31, 2028, repayment starts in the fifth year after the year of withdrawal (a 2026 withdrawal is first due in 2031). Each year, you must repay at least 1/15th of the total withdrawn amount.
• Missed repayments: If you miss a repayment in any year, the missed amount is added to your taxable income for that year. For example, if you withdrew $60,000, your annual repayment is $4,000. If you repay only $2,000 in a given year, the remaining $2,000 is included in your taxable income.
• Eligibility: You must be a first-time home buyer (have not owned a home you lived in during the last 4 years), and the funds must have been in your RRSP for at least 90 days before withdrawal.

FHSA + HBP Combined

You can use both the FHSA and the HBP for the same home purchase. A single buyer could potentially access up to $40,000 from their FHSA (tax-free, no repayment) plus $60,000 from their RRSP under the HBP (no tax upfront, but must be repaid) for a combined $100,000 from registered accounts. A couple could access up to $200,000 combined.

For detailed HBP rules, repayment schedules, and strategies for combining with the FHSA, see Module 2: RRSP Home Buyers’ Plan.

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Home Buyers’ Tax Credit (HBTC)

The Home Buyers’ Tax Credit is a non-refundable federal tax credit that provides $1,500 when you purchase your first home. It is one of the simplest programs to claim, yet many first-time buyers forget about it.

How It Works

The credit is calculated as $10,000 (the “Home Buyers’ Amount”) multiplied by the lowest federal personal income tax rate (15%), resulting in a $1,500 reduction in your federal tax owing.

Because it is non-refundable, it can reduce your federal tax owing to zero but cannot generate a refund on its own. However, most working Canadians have enough federal tax owing that the full $1,500 benefit is realized. Note that some provinces also offer their own land transfer tax rebates for first-time buyers, which stack on top of this federal credit.

Eligibility Requirements

• You must be a first-time home buyer — you (and your spouse or common-law partner) must not have owned and lived in a home in the current year or any of the four preceding years.
• The home must be registered in your name (or your spouse’s or common-law partner’s name).
• You must intend to occupy the home as your principal residence within one year of purchase.
• The home must be located in Canada.

How to Claim

Report the $10,000 Home Buyers’ Amount on line 31270 of your T1 income tax return for the year you purchased the home. If you are buying with a spouse or partner, you can split the $10,000 claim between you, but the combined total claimed cannot exceed $10,000 ($1,500 in credit).

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GST/HST New Housing Rebate

If you purchase a newly constructed home, a substantially renovated home, or build your own home, you may qualify for a rebate on the GST or the federal portion of the HST you paid on the purchase.

Federal GST Rebate Details

• Available on new homes priced up to $450,000
• Maximum rebate: $6,300 (36% of the GST paid, on homes priced up to $350,000)
• For homes priced between $350,000 and $450,000, the rebate is gradually reduced (clawed back) until it reaches $0 at $450,000
• Homes priced over $450,000 receive no federal GST rebate

Provincial HST Component Rebates

In provinces that charge HST (Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, PEI), there are additional provincial HST rebates available on new construction. These vary by province — for a side-by-side breakdown, see the program comparison table:

• Ontario: Provincial HST rebate of up to $24,000 on new homes (the most generous provincial rebate)
• Nova Scotia: Provincial rebate of up to approximately $3,000
• New Brunswick: Provincial rebate of up to $3,000
• Newfoundland and Labrador: Provincial HST rebate available on new builds
• PEI: Provincial HST rebate available on qualifying new construction

Who Qualifies

You do not need to be a first-time buyer to claim the GST/HST New Housing Rebate. It is available to anyone purchasing a qualifying new home, as long as it will be your primary residence (or a relative’s primary residence).

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First-Time Home Buyers’ GST/HST Rebate (Bill C-4)

Bill C-4 introduced a first-time home buyers’ GST/HST rebate — not an all-buyer GST exemption. CRA Excise and GST/HST News No. 122 describes the rebate as applying to eligible first-time buyers of a newly constructed or substantially renovated home.

Key Details

• Who qualifies: First-time home buyers only — not an all-buyer exemption
• Agreement of purchase and sale: on or after 20 March 2025 and before 2031 (owner-built: construction or substantial renovation begins on or after 20 March 2025 and before 2031)
• Full federal GST relief: qualifying new homes valued up to $1 million — together with the existing GST/HST new housing rebate, 100% of the GST or federal part of the HST
• Phase-out: purchase price or fair market value between $1 million and $1.5 million — the rebate is gradually reduced
• No FTHB GST/HST rebate: homes valued at $1.5 million or more
• Ontario’s Bill 114 / enhanced new housing rebate is a separate all-buyer provincial stream (purchase agreements April 2026–March 2027) — do not treat it as the same as this federal rebate

How the federal GST portion works (5% rate)

On a qualifying new home at or under $1 million, first-time buyers may recover the full federal GST (5% of the purchase price). That is $25,000 on a $500,000 home, $37,500 on a $750,000 home, and $50,000 on a $1,000,000 home. Between $1 million and $1.5 million the rebate phases out; at $1.5 million or more there is no FTHB GST/HST rebate.

How it relates to the existing GST/HST New Housing Rebate

The FTHB GST/HST rebate works together with the existing GST/HST New Housing Rebate. CRA states that together they can rebate 100% of the GST or federal part of the HST on a qualifying new or substantially renovated home valued up to $1 million. The existing rebate (maximum $6,300, clawed back between $350,000 and $450,000) remains available to buyers who are not first-time buyers.

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Summary of Federal Programs

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Sources: CRA — First Home Savings Account · CRA — Home Buyers’ Plan · CRA — Home Buyers’ Amount (Line 31270) · CRA — GST/HST New Housing Rebate · CRA — Excise and GST/HST News No. 122

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