First-Time Home Buyer Incentives Ontario 2025: How to Save $50K–$100K on Your First Home  

• The FHSA lets eligible Canadians save for a first home with tax-deductible contributions (like an RRSP) and tax-free withdrawals when you use funds for a qualifying home purchase or build. Canada

• You can contribute up to $8,000 per year, with a lifetime maximum of $40,000. Unused contribution room carries forward, giving flexibility.

• Pro tip: You can combine FHSA with the RRSP Home Buyers’ Plan (HBP) — meaning you could use both savings strategies for your down payment. Canada

• The HBP allows first-time buyers to withdraw from their RRSP tax-free to put toward a qualifying home purchase. 

• In 2025, many buyers can still use this — the limit remains up to $35,000 per person (or $70,000 for couples).

• Repayment is required — typically over 15 years. Use this option only after careful consideration, especially weighing the impact on long-term retirement savings.

• First-Time Home Buyers’ Tax Credit (HBTC): Earn a non-refundable credit of up to $10,000, which translates into a tax saving of up to $1,500 — helpful for closing costs, inspections, legal fees, etc.

• Ontario Land Transfer Tax Rebate: First-time buyers in Ontario may qualify for up to $4,000 off the provincial LTT.

• If you're buying in Toronto, there is an additional municipal rebate of up to $4,475 for first-time buyers — combining to potentially $8,475 in total land transfer tax savings. 

• How it works:First-time buyers purchasing a new build (from a builder), or building a home on owned/leased land, or buying through a co-op may be eligible. 

• Savings potential: 100% rebate of the GST on homes up to $1 million. For homes between $1 million and $1.5 million, a phased rebate applies. In ideal cases, savings could be up to $50,000. 

• Important to note: The purchase agreement with the builder must be signed on or after May 27, 2025 for the rebate to apply. 
  
  As a Mortgage Agent working in Ontario, this rebate could mean a stronger buying budget especially for first-time buyers aiming for new constructions.
  

2025 also brings changes in mortgage insurance and amortization rules that can help first-time buyers qualify for larger or more manageable mortgages:

• The insured mortgage cap has increased from $1 million to $1.5 million, making it easier for buyers in pricier markets to qualify for insured mortgages with smaller down payments.

• For insured mortgages, 30-year amortization is increasingly available — which lowers monthly payments and improves affordability for many first-time buyers. 

To illustrate how much a first-time buyer might save, consider this example for a couple purchasing a first home in Ontario in 2025:

• Both partners contribute to FHSA for several years → up to $80,000 (combined)

• Both withdraw from RRSP via HBP → up to $70,000

• Use the HBTC → tax saving of $1,500

• Receive Ontario Land Transfer Tax Rebate → $4,000 (or + Toronto rebate if applicable)

• If buying a new build post-May 27, 2025 → benefit from GST rebate (up to $50,000)

• With updated insured mortgage rules and 30-yr amortization — lower monthly payments and easier qualification

• Start early with an FHSA — the sooner you open and contribute, the more room you have to build your down payment.

• Use RRSP + HBP cautiously, and have a repayment plan before withdrawing — don’t treat it as “free money.”

• If you’re looking at new builds, aim to sign purchase agreements after May 27, 2025 to qualify for the GST rebate.

• Check local rebates (e.g., municipal land transfer tax rebates if in Toronto or another city) — they stack on top of provincial/federal programs.

• Talk to a certified mortgage agent — combining incentives with updated mortgage/insurance rules can get you into a home sooner and with better monthly payment structure.