First-Time Buyer Programs That Apply to Pre-Construction

First Home Savings Account (FHSA)

The FHSA is a registered savings plan introduced by the federal government in 2023. It is one of the most powerful first-time buyer tools available because it combines the benefits of an RRSP and a TFSA: contributions are tax-deductible (reducing your taxable income for the year), the account grows tax-free, and qualifying withdrawals for a first home purchase are completely tax-free.

• Annual contribution limit: $8,000 per year
• Lifetime contribution limit: $40,000 per person
• Eligible investments: Same as RRSPs — GICs, mutual funds, ETFs, stocks, and more
• Eligibility: You must be a Canadian resident, at least 18 years old, and have not owned a qualifying home in the current year or in any of the preceding four calendar years

For a pre-construction purchase, the qualifying withdrawal from your FHSA can be used at closing — not at the time you sign the APS. Since pre-construction closings are often three to five years out, the FHSA is an excellent place to park your deposit savings in the meantime and claim the tax deduction each year.

If you opened an FHSA in 2023 or 2024 and have been contributing $8,000 per year, you could have up to $32,000–$40,000 in tax-free savings available at closing — with deductions already taken against your income. Two buyers purchasing jointly can each use an FHSA, doubling the combined benefit.

RRSP Home Buyers' Plan

The Home Buyers' Plan (HBP) allows first-time buyers to withdraw up to $35,000 from their RRSP to fund a home purchase — tax-free at withdrawal, with repayment required over 15 years. If you don't repay the minimum each year, the unpaid amount is added to your taxable income for that year.

The $35,000 limit was increased from $25,000 as part of the 2024 federal budget. For couples purchasing jointly, each buyer can withdraw $35,000 from their own RRSP, for a combined $70,000.

For pre-construction purchases, the HBP withdrawal can be used at the time of closing — not at signing. However, the funds must have been in your RRSP for at least 90 days before withdrawal. There is a specific deadline for when you must make the purchase for the withdrawal to qualify. Your accountant can confirm the applicable rules for your closing timeline.

The FHSA and HBP can be used together. A buyer with both an FHSA ($40,000) and RRSP funds ($35,000) can access up to $75,000 per person in combined registered savings for a qualifying home purchase — $150,000 per couple.

Federal GST/HST New Housing Rebate — enhanced 2026 rules

New homes in Ontario are subject to HST at 13% (5% federal GST + 8% Ontario PST). A rebate program has existed for decades that returns a portion of this tax to eligible buyers — but until recently, it was subject to strict price caps that excluded most new Ontario homes.

In the 2024 federal budget, the government proposed significantly expanding the New Housing Rebate. Bill C-4 received Royal Assent in March 2026, implementing the enhanced rebate. Under the updated rules:

• Maximum rebate: Up to $50,000 (vs. $6,300 under the old rules)
• Eligible purchase price: Homes up to $1,000,000 (vs. $450,000 previously)
• Phase-out range: The full rebate applies on homes up to approximately $800,000 and phases out between $800,000 and $1,000,000
• Eligibility: The buyer or an immediate family member must use the property as their primary place of residence

This is a transformative change for Ontario pre-construction buyers. Under the old rules, a $900,000 condo purchase received zero federal new housing rebate. Under the enhanced rules, the same purchase is eligible for a substantial rebate — potentially $20,000–$30,000 — that is typically credited against the purchase price at closing.

Builder pricing for pre-construction units usually already incorporates the HST rebate in the stated price, assuming the buyer qualifies. This is the "HST included (for eligible buyers)" language you see in pre-construction pricing sheets. If you do not qualify for the rebate — because you won't use the unit as your primary residence — you will owe the full HST at closing. Confirm your eligibility with your accountant before signing.

Ontario Land Transfer Tax first-time buyer rebate

Ontario charges Land Transfer Tax (LTT) on all property purchases. The rate is graduated, ranging from 0.5% on the first $55,000 of purchase price up to 2.5% on amounts over $2,000,000. On a $750,000 purchase, Ontario LTT is approximately $11,475.

First-time buyers are entitled to a rebate of up to $4,000 on Ontario LTT. This effectively eliminates the tax on the first $368,333 of purchase price — so for homes under that threshold, there is no LTT at all. For homes above it, the $4,000 is credited against the tax owing at closing.

To qualify, you must be a Canadian citizen or permanent resident, at least 18 years old, and have not owned a home anywhere in the world since turning 18. If you are purchasing with a spouse or partner who has previously owned a home, the rebate is reduced proportionately based on your interest in the property.

Toronto Land Transfer Tax rebate

If your pre-construction purchase is located within the City of Toronto, you pay a second land transfer tax — the Municipal Land Transfer Tax (MLTT) — on top of the provincial LTT. The MLTT rates mirror the provincial rates and effectively double your LTT obligation on Toronto properties.

Toronto first-time buyers are entitled to a rebate of up to $4,475 on the MLTT. Combined with the provincial rebate of $4,000, Toronto first-time buyers can receive up to $8,475 in total LTT rebates at closing. For a $700,000 Toronto condo, this represents a meaningful offset to the combined LTT obligation of approximately $22,000.

The Toronto MLTT rebate eligibility criteria are the same as the provincial rebate — Canadian citizen or permanent resident, 18 or older, first-time buyer. Both rebates are claimed through the lawyer at closing and applied against the tax immediately payable.

Stacking these programs: what a first-time buyer can access

For a qualifying first-time buyer purchasing a new construction home in Ontario as their primary residence, these programs can be combined. As a practical example: a single buyer purchasing a new $750,000 condo in Toronto could potentially access an FHSA withdrawal of $40,000, an RRSP HBP withdrawal of $35,000, the enhanced federal HST new housing rebate (possibly $25,000–$35,000 credited to purchase), the Ontario LTT rebate of $4,000, and the Toronto MLTT rebate of $4,475 — for a combined benefit of over $100,000 in savings and rebates.

Not every buyer will be eligible for every program, and the rebate amounts depend on the specific purchase price and circumstances. The right approach is to meet with an accountant and a mortgage broker who specialize in first-time buyers before signing, to map out exactly which programs apply to your situation and how to maximize them.