First Time Buyer

First-time buyers in Ontario who buy a newly built home can combine several programs: HST relief on new homes, the Ontario land transfer tax refund of up to $4,000, the First Home Savings Account (FHSA), the RRSP Home Buyers’ Plan, and 30-year insured mortgages. This guide explains each one in plain language and how they apply to new and pre-construction homes in the GTA.

Last updated: October 2026. Programs change often and every one has eligibility rules. Confirm the details with your real estate lawyer and mortgage professional before you sign.

Who counts as a first-time buyer?

Each program uses its own definition. For the Ontario land transfer tax refund, you generally must never have owned a home anywhere in the world, and your spouse can’t have owned a home while you were together. For the federal First-Time Home Buyers’ GST rebate and the FHSA, you generally qualify if you haven’t lived in a home that you or your spouse owned in the current year or the previous four years. You can be a “first-time buyer” for one program and not for another, so check each one.

HST relief on new homes

New homes in Ontario are charged 13% HST (5% federal plus 8% provincial), which is why the rebates below matter so much for new-construction buyers.

Federal First-Time Home Buyers’ GST rebate

Eligible first-time buyers can recover the full 5% federal portion on a new home priced up to $1 million (up to $50,000), with the rebate phasing out between $1 million and $1.5 million. The home must be bought from a builder and used as your primary residence.

Ontario’s 2026 enhanced HST rebate

For agreements of purchase and sale signed between April 1, 2026 and March 31, 2027, Ontario has expanded HST relief on new homes bought as a primary residence. Combined with the federal relief, eligible buyers can recover up to the full 13% HST on homes up to $1 million, worth up to about $130,000, with reduced relief on homes up to $1.85 million. This expanded program is not limited to first-time buyers.

Check how your builder handles the rebate

Most Ontario builders quote prices “HST included” and have you assign the standard new housing rebate to them. With the larger 2026 rebates, it matters whether the extra relief is credited to you on closing, already built into the price, or something you claim yourself afterwards. Ask before you sign, and have your lawyer review that clause.

Ontario land transfer tax refund

Eligible first-time buyers can get a refund of up to $4,000 on the Ontario land transfer tax, usually applied by your lawyer at closing. On a $700,000 home, the provincial land transfer tax is about $10,475, so the refund brings it down to about $6,475. The projects on New-Home.ca are outside the City of Toronto, so there is no second, municipal land transfer tax. See our closing costs guide for the full rate table.

First Home Savings Account (FHSA)

The FHSA lets you save up to $8,000 a year, to a lifetime limit of $40,000. Contributions are tax-deductible like an RRSP, and withdrawals for a qualifying first home are tax-free like a TFSA. Couples can each open one, so two first-time buyers can save up to $80,000 together. Because pre-construction deposits are paid over several months, an FHSA opened early can grow alongside your deposit schedule.

RRSP Home Buyers’ Plan

The Home Buyers’ Plan lets each first-time buyer withdraw up to $60,000 from their RRSP, tax-free, to buy or build a qualifying home, and repay it over 15 years. You can use the FHSA and the Home Buyers’ Plan for the same purchase.

Mortgage rules for first-time buyers

• Minimum down payment: 5% of the first $500,000 and 10% of the portion between $500,000 and $1.5 million. Homes over $1.5 million need 20% down.
• 30-year amortization: first-time buyers, and anyone buying a newly built home, can get an insured mortgage with a 30-year amortization, which lowers the monthly payment.
• Stress test: lenders qualify you at the higher of 5.25% or your contract rate plus 2%.
• Mortgage default insurance: required with less than 20% down. The premium is added to your mortgage, but Ontario’s 8% sales tax on the premium must be paid in cash at closing.

Why pre-construction suits many first-time buyers

A pre-construction freehold home lets you lock in today’s price and spread a 10% deposit over several months, often starting from $10,000 with your offer, while you keep saving for closing. Your deposit is protected by Tarion up to legal limits, and the home comes with Ontario’s new home warranty. See our buyer’s guide for how deposits, occupancy and closing work.

First-time buyer questions

Can first-time buyers get HST back on a new home in Ontario?

Yes. Eligible first-time buyers can recover the 5% federal portion on new homes up to $1 million, and for agreements signed between April 1, 2026 and March 31, 2027, Ontario’s expanded rebate can cover the provincial portion as well, up to about $130,000 combined. Conditions apply.

How much do I need for a down payment on a $700,000 townhome?

The minimum is $45,000: 5% of the first $500,000 ($25,000) plus 10% of the remaining $200,000 ($20,000). With a pre-construction home, the builder’s deposit (often 10%) is usually paid over several months and counts toward this.

Can I use my FHSA for a pre-construction home?

Generally yes, but the FHSA has timing rules about when you withdraw and when the home must be acquired. Talk to your financial institution before using FHSA money for deposits.

Where can I find new homes for first-time buyers?

Browse all projects or start with townhomes priced under $700,000 in Mississauga, Brampton, Pickering, Niagara Falls and East Gwillimbury.

Questions about your situation? Contact UB Realty Inc., Brokerage or call 647-381-4000. This guide is general information, not legal, tax or mortgage advice.