First-Time Home Buyer Programs in Canada: FHSA, HBP, Tax Credits and Quebec Incentives

You want to buy your first home.

You start saving.

You watch property prices.

You calculate your down payment.

Then suddenly your home-buying plan comes with an entirely new vocabulary:

FHSA. HBP. RRSP. Tax credits. Municipal programs. Mortgage insurance.

And one question comes up quickly:

“Which first-time home buyer programs can I actually use?”

That is a good question.

But there is another one that matters even more:

“Which of those programs actually improve my financial position?”

Some programs can help you save for your down payment more efficiently.

Others can reduce certain costs associated with buying.

Some can be combined.

But access to more money does not automatically mean you should buy a more expensive property.

A first-time buyer program should strengthen your buying strategy. It should not simply increase the price you feel comfortable offering.

What First-Time Home Buyer Programs Are Available in Canada?

For a first-time buyer purchasing in Quebec, some of the most important programs and measures to understand include:

• the First Home Savings Account, or FHSA;
• the Home Buyers’ Plan, or HBP;
• the federal Home Buyers’ Amount;
• Quebec’s Home Buyers’ Tax Credit;
• Quebec’s refundable tax credit related to land transfer duties;
• certain municipal homeownership programs;
• the federal GST rebate available for certain qualifying first-time buyers of new homes.

You may qualify for several of these programs.

Or only some of them.

The right combination depends on your savings, RRSPs, income, timing, family situation and the type of property you plan to purchase.

That is why I would start with your financial situation before starting with the list of programs.

What Happened to the First-Time Home Buyer Incentive?

This is worth mentioning because a lot of older information online is now outdated.

The federal First-Time Home Buyer Incentive is no longer accepting applications.

CMHC confirms that the deadline for new applications was March 21, 2024.

The former program provided a shared-equity contribution from the federal government toward the purchase of an eligible home.

You can verify its current status on the CMHC First-Time Home Buyer Incentive page.

If you are buying today, this program should no longer form part of your purchase strategy.

Fortunately, several other first-time buyer tools remain available.

The FHSA: One of the First Programs to Understand

The First Home Savings Account, or FHSA, was designed specifically to help eligible first-time buyers save toward a qualifying home.

The Canada Revenue Agency explains how the FHSA works.

Why is it particularly useful?

Because it combines two important tax advantages.

Eligible contributions are generally deductible from your taxable income.

And when you make a qualifying withdrawal to purchase a qualifying first home, that withdrawal is generally tax-free.

In simple terms, you may receive a tax benefit when contributing, allow the money to grow inside the account and then make a qualifying withdrawal for your home purchase without including that withdrawal in your taxable income.

How Much Can You Contribute to an FHSA?

When you open your first FHSA, you generally receive:

$8,000 of participation room.

The lifetime contribution limit is:

$40,000.

Certain unused participation room can also be carried forward, subject to the program rules.

But there is one detail first-time buyers should understand early:

Your FHSA participation room generally starts accumulating only after you open your first FHSA.

It does not automatically accumulate simply because you turned 18 or started thinking about homeownership.

If you are eligible and think you may buy several years from now, when you open the account can therefore matter.

The Home Buyers’ Plan: Up to $60,000 From Your RRSP

The Home Buyers’ Plan, or HBP, allows an eligible buyer to withdraw funds from an RRSP to buy or build a qualifying home.

The current withdrawal limit is:

$60,000 per person.

The Canada Revenue Agency provides the current Home Buyers’ Plan rules.

But there is an important distinction.

The HBP is not free money.

Amounts withdrawn through the program generally need to be repaid into your RRSP over a period of up to 15 years.

Temporary repayment relief currently applies to certain first withdrawals made from 2026 through 2028. Under those rules, the 15-year repayment period begins in the fifth year following the year of the first withdrawal.

The rule that applies to you should always be confirmed when you plan to use the program.

Can You Use the FHSA and HBP for the Same Home?

Yes, if you satisfy all of the applicable conditions.

And this can be one of the most useful strategies for certain first-time buyers.

The CRA confirms that an eligible buyer can make a qualifying FHSA withdrawal and an HBP withdrawal for the same qualifying home.

Imagine a buyer who has accumulated:

$40,000 in an FHSA

and also has eligible funds available inside an RRSP.

Depending on that buyer’s circumstances, both accounts could contribute to the down-payment strategy.

For an eligible couple, the available amounts can become considerably larger because the limits are generally individual.

But this creates another question:

Just because you can access more money, should you use all of it?

Not automatically.

With the HBP in particular, you are using money that was being saved for retirement and creating future repayment obligations.

The useful question is not simply:

“What is the maximum amount I can withdraw?”

It is:

“What combination lets me buy without weakening my finances after the purchase?”

Who Counts as a First-Time Home Buyer?

The answer is more nuanced than many buyers expect.

Depending on the program, you may sometimes qualify as a first-time buyer even if you owned a property in the past.

Definitions can also differ between programs.

The FHSA has its own qualifying conditions.

The HBP has its own first-time buyer test.

Tax credits can have their own definitions as well.

So be careful with a statement such as:

“I owned a property years ago, so I cannot use any first-time buyer programs.”

That is not necessarily true.

The reverse also matters.

Buying a home for the first time does not automatically make you eligible for every available program.

Check eligibility separately for every program you intend to use.

What Federal Tax Credit Should First-Time Buyers Check?

Eligible buyers should review the federal Home Buyers’ Amount.

The Canada Revenue Agency explains the Home Buyers’ Amount.

The current maximum amount used to calculate the credit is:

$10,000

for a qualifying home.

But there is an important distinction:

This does not mean the federal government gives you a $10,000 cheque.

The amount is used to calculate a non-refundable tax credit.

That credit can reduce federal income tax you owe, but it does not automatically create an equivalent cash refund.

This is a good example of why understanding what a program actually does matters more than simply knowing its headline number.

Quebec Also Has a Home Buyers’ Tax Credit

Quebec has its own Home Buyers’ Tax Credit.

The maximum credit is currently:

$1,400 per qualifying home.

If more than one eligible person claims the credit for the same property, the amount can be divided between them, subject to the applicable rules.

This credit is separate from another Quebec measure related to municipal land transfer duties.

Quebec’s Refundable Credit for Land Transfer Duties

Beginning with the 2026 taxation year, Quebec introduced a refundable tax credit for eligible homebuyers related to municipal land transfer duties.

Those duties are commonly called the welcome tax.

The refundable credit can provide up to:

$5,875

toward eligible transfer duties, subject to the applicable conditions.

The amount depends on the transfer duties paid and the tax base used to calculate them.

Revenu Québec explains the refundable tax credit for access to homeownership.

This is very different from simply saying:

“The government will pay your welcome tax.”

The amount you can actually receive depends on the property and your circumstances.

Do Not Confuse Quebec’s Two Homebuyer Credits

This distinction matters.

Quebec has both:

a Home Buyers’ Tax Credit with a maximum of $1,400 per qualifying home

and

a refundable tax credit related to eligible land transfer duties that can reach $5,875.

They are separate measures with different rules.

And neither should automatically be treated as money you already have available for your down payment or closing costs.

Do not build your purchase budget using money you have not yet received.

What About First-Time Buyers Purchasing a New Home?

First-time buyers purchasing certain new or substantially renovated homes should also investigate the federal First-Time Home Buyers’ GST/HST Rebate.

Eligible buyers may be able to recover up to:

$50,000

of GST, or the federal portion of HST, on a qualifying new home.

For qualifying homes valued at $1 million or less, the rebate can cover up to 100% of the applicable GST, subject to the maximum.

For qualifying homes valued above $1 million and below $1.5 million, the maximum rebate is gradually reduced.

At $1.5 million or more, the rebate is not available.

The Canada Revenue Agency explains the First-Time Home Buyers’ GST/HST Rebate.

This can represent meaningful assistance.

But do not buy a new property simply because a tax rebate sounds attractive.

Compare the entire cost.

Purchase price.

Taxes.

Eligible rebates.

Condo fees if applicable.

Builder extras.

Financing costs.

And what you are actually getting for your money.

A tax incentive does not automatically turn an overpriced property into a good financial decision.

Are There Municipal Programs for First-Time Buyers?

Some municipalities offer their own homeownership programs or incentives.

But there is no single municipal program that applies throughout Quebec.

A program available in Montreal may not exist in Boucherville or Beloeil.

Programs can also be modified, suspended or replaced.

Before including municipal assistance in your purchase plan, verify:

• whether the program is still active;
• which properties qualify;
• whether a maximum purchase price applies;
• whether there are family or occupancy requirements;
• when the application must be submitted;
• whether the program can be combined with other assistance.

A program only helps your purchase if both you and the property actually qualify.

Can These Programs Replace Your Down Payment?

Not necessarily.

The phrase “government help for first-time home buyers” can create the wrong impression.

An FHSA contains money you contributed.

The HBP uses money from your RRSP.

Tax credits can offset certain costs according to their rules.

These programs are not all government grants that simply provide your down payment for you.

Many of them help you use your own money more efficiently.

That distinction matters.

Should You Max Out Your FHSA Before Using the HBP?

Not automatically.

The FHSA has significant tax advantages, but the best strategy depends on your financial situation.

Ask yourself:

Do you already have substantial money inside your RRSP?

How many years remain before you expect to buy?

What is your taxable income?

Have you already opened an FHSA?

How much cash do you have outside registered accounts?

How much do you want to keep after buying?

Using every program to its maximum is not automatically the best strategy.

Depending on your circumstances, a financial planner or tax professional can help determine how to structure the savings side of your purchase.

Do Not Use Every Dollar You Have Just to Maximize the Down Payment

This is one of the mistakes I would especially want a first-time buyer to avoid.

Suppose your FHSA, HBP and other savings allow you to make a substantial down payment.

Great.

But what remains afterward?

You may still need money for:

• land transfer duties;
• notary fees;
• the building inspection;
• moving costs;
• adjustments at the notary;
• insurance;
• furniture;
• repairs or renovations;
• unexpected expenses;
• an emergency fund.

Becoming a homeowner with $0 of financial breathing room is not necessarily a victory.

You may have successfully purchased the home.

But have you created a financial situation you can comfortably maintain?

How Much Should You Save Before Buying Your First Home?

There is no single number that works for everyone.

Your savings target should ideally cover three different categories.

1. Your down payment

The amount depends on the price of the property and the type of mortgage financing.

2. Your home-buying expenses

These can include the notary, inspection, land transfer duties and transaction adjustments.

3. Your reserve after buying

This is the category many first-time buyers forget.

The furnace can fail.

A plumbing issue can appear.

Your car can need an unexpected repair.

Life does not stop creating expenses because you just purchased a home.

Your financial plan should not work only if absolutely nothing goes wrong.

The goal is not to arrive at the notary with exactly enough money.

It is to leave the notary and remain financially stable.

Should You Wait and Save a Larger Down Payment?

Sometimes.

But not automatically.

Waiting can allow you to increase your down payment, build your FHSA, reduce the mortgage amount, strengthen your financial profile and preserve more cash after the purchase.

But waiting can also carry a cost.

Home prices may change.

Interest rates may change.

Your personal circumstances may change.

The type of property you need may change.

So instead of asking only:

“Should I wait?”

Ask:

“What specifically improves in my situation if I wait?”

If the answer is clear, waiting may make sense.

But if you are already financially prepared and you are waiting only because you believe every first-time buyer must have 20% down, it may be worth running the numbers again.

Buying Your First Home in Greater Montreal and the South Shore

Federal and Quebec programs may apply whether you are searching for your first property in Saint-Laurent, Dorval, Pointe-Claire, Verdun, LaSalle, Boucherville, Saint-Bruno-de-Montarville, Beloeil or Mont-Saint-Hilaire.

But the right buying strategy can look very different depending on the market and property type.

A condo in Saint-Laurent may require a different budget from a detached home in Beloeil.

A buyer in Verdun may prioritize location and accept a smaller property.

A family looking in Saint-Bruno-de-Montarville may need to compare purchase price, down payment and monthly ownership costs differently.

Programs can help.

But they should never replace a realistic analysis of what you can actually afford in the area where you want to live.

Questions to Ask Before Using a First-Time Buyer Program

Before relying on any incentive in your home-buying plan, ask:

• Do I actually qualify under this program’s definition?
• How much can I use?
• Does the money have to be repaid?
• When will I actually receive the financial benefit?
• Can I combine it with the FHSA or HBP?
• Is there a deadline?
• Does the property itself have to meet specific conditions?
• Will this strategy leave me with enough cash after I buy?

And most importantly:

Does this program genuinely improve my situation, or does it simply allow me to buy more?

That distinction can prevent a financially uncomfortable first purchase.

The Bottom Line

Buying your first property in Canada can feel complicated because several accounts, programs and tax credits are available.

You do not need to use all of them.

You need to understand which ones apply to your situation.

The FHSA can help eligible buyers save for a first home while receiving valuable tax advantages.

The Home Buyers’ Plan currently allows an eligible individual to withdraw up to $60,000 from an RRSP.

The FHSA and HBP can be used toward the same qualifying home when all applicable conditions are met.

Eligible Quebec buyers should also investigate the provincial Home Buyers’ Tax Credit, the refundable credit related to land transfer duties and, for qualifying new homes, the federal First-Time Home Buyers’ GST/HST Rebate.

But do not begin with:

“What is the maximum amount of assistance I can get?”

Start with:

“What combination of savings, down payment and first-time buyer programs lets me purchase without making my finances too tight afterward?”

Because a successful first purchase is not simply about becoming a homeowner.

It is about becoming a homeowner in a financial position you can actually sustain.

The right decision. At the right time. For the right reasons.

Jonathan Cabana
Residential and Commercial Real Estate Broker
eXp Québec
Greater Montreal | South Shore
(514) 476-0730