Are there any incentives or tax breaks for buying a home?

There are different first-time home buyer incentive programs offered by the government to help you make your first purchase. 

Home Buyer's Plan 

The CRA offers the Home Buyer's Plan (HBP) program that works with your registered retirement savings plan (RRSP). It lets you withdraw up to $35,000 from your RRSPs to buy or build a home for yourself or a disabled person related to you. With the HBP program you must pay back the borrowed funds within 15 years. 

To qualify for the HBP you must meet the following main criteria:

  • must be a first-time buyer.
  • be a Canadian resident at the time of withdrawing funds from your RRSP and up to the time you plan to purchase or build the home.
  • provide a written agreement of the home you plan to purchase or build for yourself or a person related to you with a disability.
  • you or the disabled related person must occupy the home as your/their principal residence or within 1 year after the home was purchased or built.

For more information on how to participate in the HBP, withdraw funds from your RRSPs, repaying HBP funds and other frequently asked questions visit the HBP page on the CRA site.

Ontario Land Transfer Tax Rebate

When you buy a home or land to build a home you must pay a provincial land transfer tax. If you buy in Toronto, there is a second municipal land transfer tax you must pay, on top of the provincial one.

You can claim a refund of up up to $4000 in provincial refunds if you:

  • are a first time buyer
  • never owned a home anywhere prior to this purchase
If you are purchasing a home or land in Toronto, you can also claim up to $4475 in municipal land transfer tax rebates. To qualify for this you must:

  • be a Canadian citizen or permanent resident
  • be a first time buyer (never previously owned a home or land anywhere in the world)
  • be 18 yrs of age and older 
  • purchase the home to occupy it as your principal residence within the first 9 months after the property title transfer or "conveyance" occurs

First-Time Home Buyer Tax Credit

The First-Time Home Buyer Tax Credit (HBTC) is a one-time tax credit or reduction you can claim through your income tax. You can claim $5000 for the purchase of your first home if:

  • the home is your principal residence and you're a first-time buyer (you did not live in a home owned by you or your spouse/common law partner in the preceding 4 years prior to the purchase)
  • you or your spouse or common-law partner bought a qualifying home

For More Information

  • Buying Your First Home in Canada: What Newcomers Need to Know - A brochure with information about the process of buying a home in Canada. From the CMHC. Available in many languages.
  • Buying a House - Tips and information about buying a new home from the Ontario Securities Commission.
  • Homebuying Step-by-Step - An online guide that explains many topics, such as cost, finding the right home, and home repair and maintenance.
  • Making an Offer and Closing the Deal - This brochure has tips on how to make an offer, close the deal and buy your first home in Canada. It is from Canada Mortgage and Housing Corporation. It is available in many languages.
  • Ontario Tax Credits and Benefits - Learn about the different tax credits and benefits you can get to help you with living costs when you file your income tax return. From the Ministry of Finance.
Last updated: September 22, 2021 4001296