Tax-Free First Home Savings Account (FHSA)
This is a powerful way to save for your first home. It’s also a great way for parents and grandparents to help!
- Contribute up to $8,000 per year, with a lifetime limit of $40,000 ($80,000 for a couple).
- Contributions are tax-deductible like an RRSP, and withdrawals are tax-free like a TFSA.
- You can combine the FHSA with the RRSP Home Buyers’ Plan for the same home purchase.
- You can contribute up to $8,000 per year, and unused room carries forward — but only after your FHSA is opened. You can also transfer funds from your RRSP (no deduction, but no impact on RRSP room).
If you don’t end up buying a home, your balance can be transferred to your RRSP with no tax impact.
RRSP Home Buyer’s Plan (HBP)
First-time buyers can withdraw up to $60,000 tax-free per person ($120,000 for couples) from their RRSPs to buy or build a qualifying home. The withdrawal rules are:
- Funds must stay in your RRSP for at least 90 days before you withdraw.
- Normally, repayments would start two years later and spread out over 15 years (minimum 1/15 each year). If repayments aren’t made, the amount that was required to be repaid is added to your taxable income.
Important change (2025): If your first HBP withdrawal was made between January 1, 2022, and December 31, 2025, your repayment start is deferred. You now have a five-year grace period before you begin repayment and still have 15 years to repay overall.
Pro tip: Contribute to your RRSP before the tax deadline to trigger a nice tax refund — then wait 90 days and withdraw the funds tax-free under the HBP. This may be a good way to put your downpayment funds to work, and it’s a smart way to get the tax man to help with your home purchase.
Land Transfer Tax Rebate
Land transfer tax can catch first-time buyers off guard. Luckily, there’s help:
- Ontario rebate: Up to $4,000
- Toronto rebate (if applicable): Up to $4,475 on top of the Ontario rebate
If you’re buying in Brampton, you’re eligible for the Ontario rebate only — still a meaningful savings at closing.
First-Time Home Buyers’ Tax Credit
The federal tax credit was doubled to $10,000 in Budget 2022, giving you up to $1,500 in tax relief for homes purchased on or after January 1, 2022. This helps offset closing costs and moving expenses.
30-Year Amortization on Insured Mortgages
Effective December 15, 2024, all first-time buyers with less than 20% down can now access 30-year amortizations on insured mortgages—whether buying a new build or resale home.
Previously restricted to new builds, this change means:
- Lower monthly payments
- Larger mortgage qualification
- Available on homes up to $1.5M
Note: A 0.20% mortgage insurance premium surcharge applies, and you’ll still need to pass the stress test. But for many buyers in Brampton, this flexibility is a game-changer.
New $1.5M Cap for Insured Mortgages
As of December 15, 2024, the maximum home price eligible for mortgage default insurance increased from $1 million to $1.5 million — the first update in over a decade. While this isn’t limited to first-time buyers, it’s a major advantage for homebuyers in higher-priced markets like Brampton, Mississauga, and the Greater Toronto Area.
What this means for you:
- You can now finance a home priced between $1 million and $1.5 million with a down payment between 5% and 19.99%, without needing 20% equity, and access lower insured mortgage rates.
- The minimum down payment rules are:
- 5% on the first $500,000
- 10% on the portion between $500,000 and $1.5 million
GST Relief + HST Rebate: Big Tax Savings on New Builds
The federal government now offers a First-Time Home Buyers’ GST rebate, allowing eligible buyers to recover up to $50,000 of the GST (or federal portion of HST) on new or substantially renovated homes. The rebate is fully available on homes priced up to $1 million, then phases out between $1 million and $1.5 million, with no rebate available above $1.5 million. The program applies to agreements of purchase and sale entered into on or after March 20, 2025, and the home must be intended as a primary residence, with at least one buyer qualifying as a first-time home buyer.
In addition, Ontario’s existing New Housing Rebate allows buyers (first-time or not) to recover up to $24,000, equal to 75% of the provincial portion of the HST (8%). This rebate applies regardless of purchase price, provided the home is used as a primary residence by the buyer or an immediate family member.
Proposed Change (Important): Ontario Expanding HST Relief
Ontario has proposed a major expansion to the HST rebate on new homes that would effectively eliminate the full 13% HST (5% federal + 8% provincial) on qualifying purchases — creating potential savings of up to $130,000.
What is proposed:
- Eliminate the remaining 8% provincial HST on new homes
- Combine with the federal portion to deliver up to $130,000 in total tax relief
- Expand eligibility beyond first-time buyers to all buyers, including investors
How the $130,000 rebate works:
✔ Full rebate (up to $130,000) on homes priced up to $1 million
✔ The maximum $130,000 rebate is maintained on homes between $1 million and $1.5 million
✔ The rebate then gradually decreases between $1.5 million and approximately $1.85 million
✔ At that level, it returns to the existing $24,000 rebate
Proposed timing framework:
- Purchase agreements are expected to be signed between April 1, 2026 and March 31, 2027
- Construction must begin on or before December 31, 2028
- Homes must be substantially completed by December 31, 2031
Who it is expected to apply to:
✔ Newly constructed homes, including unsold builder inventory
✔ Homes must be:
-
- new and never occupied
- purchased directly from the builder
✔ Expected to apply to:
-
- primary residences
- residential rental properties (investor purchases)
Important:
This expanded HST relief is currently proposed and not yet law. Final program details — including eligibility, timing, and structure — will be confirmed once legislation is passed and may change.
CMHC Eco Plus, Eco Improvement & Insurer Programs
Going green can cut your mortgage insurance costs by 25%, whether you’re buying a high-efficiency home or renovating to improve energy performance.
✅ CMHC Eco Plus (For energy-efficient home purchases)Receive a 25% refund on CMHC mortgage insurance when your new or existing home meets one of these standards:
- Certified under programs like ENERGY STAR®, R-2000, Passive House, or/li>
- Demonstrates top performance via EnerGuide ratings for energy use or greenhouse gas emissions.
✅ CMHC Eco Improvement (For renovations)If you’ve already purchased with CMHC mortgage insurance, you can earn the same 25% refund once you spend $20,000 or more on eligible energy-efficient renovations, documented through receipts and an EnerGuide Renovation Upgrade Report.
Similar Programs from Sagen & Canada GuarantySagen’s Energy Efficient Housing Program and Canada Guaranty’s Energy-Efficient Advantage Program also offer 25% premium refunds, whether you’re purchasing or renovating.
- Sagen: Covers both energy-efficient home purchases and renovation projects with qualifying upgrades.
- Canada Guaranty: Applies to both new/energy-efficient home purchases and energy-efficient renovations, with the same 25% refund for qualifying upgrades .
These programs require documentation (EnerGuide labels, upgrade receipts, etc.) submitted within 24 months of closing.
First-Time Home Buyer Incentive – Cancelled
This shared equity program was officially discontinued in March 2024. While the idea was to help with down payments, most buyers weren’t comfortable with the idea of giving up equity. Only about 23,000 Canadians used it—far short of the government’s original goal.
Why Work with Rakhi Madan, Brampton Mortgage Broker?
Government programs can help, but only if you use them wisely—and that’s where Rakhi Madan comes in.
As an experienced mortgage broker in Brampton, Rakhi helps you:
- Navigate the latest updates, like 30-year amortizations and the GST waiver
- Stack programs like the FHSA and the HBP for maximum impact
- Access multiple lenders and get the best rates for your budget and goals
Whether you’re buying a new build or a resale, Rakhi’s job is to make homeownership more achievable—and that starts with smart mortgage planning tailored to first-time buyers in Brampton.
