• First Home Savings Account (FHSA)

The First Home Savings Account is one of the most powerful savings tools available to prospective first-time buyers in Canadian history. Introduced in 2023, the FHSA combines the best features of an RRSP (contributions are tax-deductible) and a TFSA (qualifying withdrawals are tax-free), specifically for the purpose of saving toward a first home purchase.

To open an FHSA, you must be a Canadian resident, at least 18 years of age, and a first-time home buyer — meaning you have not owned a qualifying home as your principal place of residence at any time during the current calendar year or in the preceding four calendar years. You can contribute up to $8,000 per year, with a lifetime contribution limit of $40,000. Unused room from one year can be carried forward to the next, up to a maximum of $8,000 in carry-forward room at any time. Contributions reduce your taxable income in the year they are made, exactly as RRSP contributions do.

Qualifying withdrawals are entirely tax-free. To make a qualifying withdrawal, you must be a first-time buyer, have a written agreement to buy or build a qualifying home, intend to occupy the home as your principal place of residence within one year, and be a Canadian resident at the time of withdrawal and at acquisition. If you do not purchase a home within 15 years of opening your FHSA, or by age 71 (whichever is earlier), the account must be closed and any remaining funds can be transferred to an RRSP or RRIF without affecting your RRSP room — meaning the account has no downside if your plans change. You can hold most investment types inside an FHSA: GICs, ETFs, mutual funds, stocks, and bonds.

• Home Buyers' Plan (HBP)

The Home Buyers' Plan allows first-time buyers to withdraw up to $35,000 from their registered retirement savings plans (RRSPs) to use toward the purchase or construction of a qualifying first home, without the withdrawal being included in taxable income at the time of withdrawal. Couples where both partners are first-time buyers can each withdraw $35,000, for a combined total of $70,000.

To qualify, you must be a first-time buyer under the same definition as the FHSA: you cannot have owned a qualifying home as your principal residence in the current year or in the preceding four calendar years. The funds must have been in your RRSP for at least 90 days before the withdrawal — you cannot contribute money specifically to take it out immediately. You must have a written agreement to buy or build a qualifying home, and you must intend to occupy it as your principal residence within one year of purchase or construction.

The withdrawal is not a gift — it must be repaid. Starting in the second calendar year after the year of your first HBP withdrawal, you are required to repay at least 1/15th of the total amount each year for 15 years. Repayments are made by contributing to your RRSP and designating the contribution as an HBP repayment on your income tax return. If you do not make the required annual repayment, that portion is added to your taxable income for the year. This repayment obligation is important to factor into your post-purchase budget — it is an annual commitment for a decade and a half.

• First-Time Home Buyers' Tax Credit (HBTC)

The First-Time Home Buyers' Tax Credit is a federal non-refundable tax credit that provides up to $1,500 in tax relief for eligible first-time buyers in the year they purchase a home. The credit is calculated as 15% (the lowest federal tax rate) applied to a $10,000 eligible amount — producing a maximum credit of $1,500. The credit was doubled from its original $750 maximum starting with the 2022 tax year.

Eligibility mirrors the other first-time buyer definitions: you cannot have lived in a home you or your spouse owned as your principal residence in the current year or any of the preceding four calendar years. You must have acquired a qualifying home — a new or existing residential property in Canada that you intend to occupy as your principal place of residence. Condominiums, co-operative housing units, townhouses, and detached homes all qualify. The credit can also be claimed by a person with a disability or a person purchasing a home for the benefit of a related person with a disability, even if they are not a first-time buyer, as long as the home is acquired to enable the person with a disability to live in a more accessible environment.

To claim the credit, enter $10,000 on line 31270 of your T1 income tax return for the year of purchase. If you purchased the home with a spouse or common-law partner, you can split the claim between your returns, but the combined total cannot exceed $10,000. The credit reduces your federal tax payable; it does not generate a refund if your tax owing is already zero.

• GST/HST New Housing Rebate

When you purchase a newly built home or substantially renovate an existing one, the purchase is subject to GST or HST depending on the province. The GST/HST New Housing Rebate recovers a portion of this tax for buyers who purchase the home as their primary place of residence.

The federal component of the rebate returns 36% of the 5% federal GST paid on homes priced at $350,000 or less, for a maximum federal rebate of $6,300. The rebate phases out linearly between $350,000 and $450,000, and no federal rebate applies to homes priced at $450,000 or above. In Ontario, the provincial component of the rebate returns 75% of the 8% Ontario HST component on homes priced at $400,000 or less, for a maximum provincial rebate of $24,000. Unlike the federal rebate, the Ontario provincial rebate does not phase out based on price — it applies as long as the purchase price is at or below $400,000 and the buyer is an owner-occupant.

In most new construction transactions, the builder prices the home “inclusive of rebate” and applies the rebate on the buyer's behalf, reducing the purchase price by the expected rebate amount. In exchange, you as the buyer assign the rebate to the builder. This arrangement only works if you intend to owner-occupy — if you are purchasing as an investment rental, you do not qualify for the owner-occupant rebate and the builder may pursue you for the full rebate amount they credited. Investors purchasing new construction as rentals may instead qualify for the GST/HST New Residential Rental Property Rebate, which has different eligibility conditions and is claimed directly by the buyer.

• Home Accessibility Tax Credit (HATC)

The Home Accessibility Tax Credit is a federal non-refundable credit available to eligible individuals who make qualifying renovations to a home to improve accessibility or to allow a person with a disability to be more mobile or functional within the residence. The credit applies to the cost of renovations and alterations to an eligible dwelling.

The maximum eligible expense amount is $20,000 per year, producing a maximum annual tax credit of $3,000 (calculated at the 15% lowest federal rate). Eligible expenses include installation of ramps, grab bars, walk-in bathtubs, wheel-in showers, widened doorways, stair lifts, non-slip flooring, and other modifications that improve safety and mobility for a qualifying individual. The work must be of an enduring nature and integral to the dwelling — items like portable equipment, housekeeping, or appliances that are not permanently installed do not qualify.

A qualifying individual for the HATC is either a person who is 65 years or older at the end of the tax year, or a person who is eligible for the Disability Tax Credit (DTC). The credit can be claimed by the qualifying individual themselves, or by an eligible supporting individual such as a spouse, common-law partner, or other specified relative, if the qualifying individual lives in the eligible dwelling. Claim eligible expenses on line 31285 of your T1 return. Expenses claimed under HATC can also be claimed under the medical expense tax credit if they otherwise qualify, but the same dollar cannot be claimed twice under both credits.

• Multi-Generational Home Renovation Tax Credit (MGHRTC)

The Multi-Generational Home Renovation Tax Credit was introduced in 2023 to support families who create a secondary dwelling unit within their home to accommodate a senior family member or an adult family member with a disability. The credit recognises that purpose-built secondary suites — basement apartments, laneway additions, or in-law suites — represent a practical housing solution for multi-generational families and reduces the net cost of creating one.

The credit is a 15% non-refundable credit on up to $50,000 of eligible renovation expenses, for a maximum lifetime credit of $7,500. It is a lifetime credit — meaning it can only be claimed once per qualifying occupant added to the home, not annually. Eligible expenses include construction, renovation, and installation costs directly related to the creation of a self-contained secondary unit, including a separate entrance, kitchen, bathroom, and sleeping area. The secondary unit must be created for a qualifying individual who is either 65 years or older, or an adult who is eligible for the Disability Tax Credit.

The qualifying individual must be related to the homeowner and must use the secondary unit as their principal place of residence. The homeowner must hold a qualifying ownership interest in the property. Claim eligible expenses on line 45355 of your T1 return. Expenses that are also claimed under the HATC cannot be claimed again under the MGHRTC — you must allocate expenses between the two credits without double-counting.

• Program Summary

The table below summarises all six programs covered in this guide for quick reference.

• Provincial Programs Worth Knowing

Beyond the federal programs above, most provinces offer additional first-time buyer benefits. In Ontario, first-time buyers receive a rebate of up to $4,000 on provincial land transfer tax and up to $4,475 on the Toronto municipal land transfer tax. British Columbia offers a full Property Transfer Tax exemption for first-time buyers on homes priced under $500,000 with a phase-out to $525,000. Manitoba provides an LTT rebate of up to $4,500 for first-time buyers on homes valued under $500,000. Quebec's welcome tax (droits de mutation) rebate of up to $5,000 applies to qualifying first-time purchases.

Several provinces also offer first-time buyer down payment assistance programs, though availability, eligibility, and benefit amounts change frequently. Nova Scotia, New Brunswick, and PEI have at various times offered targeted assistance to first-time buyers in specific income brackets or geographic areas. Check directly with your provincial housing authority for current offerings, as these programs are the most likely to have changed since this guide was written.

• Stacking Programs: What Combines

The most powerful aspect of these programs is that most of them can be used together, dramatically compounding the benefit for buyers who plan ahead. Understanding which programs stack is as important as understanding each program individually.

The FHSA and the Home Buyers' Plan are fully stackable — a first-time buyer can use both simultaneously on the same purchase. This means a single buyer can access up to $40,000 tax-free from an FHSA plus up to $35,000 from an RRSP under the HBP, for a combined $75,000 toward a down payment. For couples where both partners qualify, this doubles to $150,000 in tax-sheltered savings that can be directed toward a down payment with no immediate income tax consequence.

The First-Time Home Buyers' Tax Credit stacks on top of everything else. Regardless of whether you use the FHSA, the HBP, or both, you can also claim the $1,500 HBTC in the year of purchase. It is a simple claim on your annual return and requires no additional action beyond entering the eligible amount on line 31270.

For buyers of new construction, the GST/HST New Housing Rebate is also combinable with the above programs, since it operates on the tax side of the transaction rather than the savings and credit side. A buyer who deploys both their FHSA and HBP funds toward the down payment on a new build, claims the HBTC in the purchase year, and benefits from the HST rebate on the new construction price is capturing value from four separate programs simultaneously.

The HATC and MGHRTC are post-purchase programs that apply to renovation work, so they do not interact with the purchase-stage programs above — but they can both be claimed by a household in the same tax year, provided the expenses claimed under each are for different eligible work. A household that creates a secondary suite for a parent aged 65 or older could potentially claim the MGHRTC on the eligible construction costs and the HATC on separately qualifying accessibility improvements within that same suite, provided there is no overlap in the expenses allocated to each credit.

• The Bottom Line

Canadian governments have created a substantial toolkit of programs to help buyers enter the housing market, and the buyers who benefit most are the ones who learn about these programs early enough to use them strategically — not after the fact. Open an FHSA the moment you are eligible, even if you are years away from purchasing. Understand your HBP eligibility before you deplete your RRSP for other purposes. Know which programs apply to your specific purchase before you sit down with your lawyer on closing day. The combined value of these programs — properly planned and claimed — can represent tens of thousands of dollars in tax savings, down payment augmentation, and purchase-year credits. None of that money requires you to do anything heroic. It only requires that you know it is there and take the steps to claim it.