If you happen to’ve been poking across the thought of shopping for your first residence in Canada, you’ve in all probability observed that “first-time homebuyer” doesn’t all the time imply what you assume it does. Completely different applications, federal and provincial, outline it in numerous methods, and that may make issues complicated quick.
We work with lots of shoppers who get tripped up by this. Somebody will inform me they’re a first-time homebuyer as a result of they’ve by no means purchased a house in Canada, solely to find inheritor earlier residence in a foreign country disqualifies them from a key profit right here. Or, on the flip aspect, somebody who owned a apartment years in the past doesn’t notice they may nonetheless qualify for sure first-time purchaser applications once more underneath the appropriate circumstances.
So let’s break it down. Right here’s how “first-time homebuyer” is outlined throughout three main applications Canadians usually depend on: the Ontario Land Switch Tax Rebate, the RRSP House Patrons’ Plan (HBP), and the First House Financial savings Account (FHSA).
How does Ontario outline a first-time homebuyer for the land switch tax rebate?
If you happen to’re shopping for property in Ontario, the land switch tax (LTT) rebate might be the primary program you’ll hear about. It will possibly prevent as much as $4,000 on the provincial land switch tax, and one other $4,475 on the Toronto municipal land switch tax in case you’re shopping for within the metropolis.
However the eligibility guidelines listed here are strict.
The never-ever rule
To qualify:
- You should be at the least 18 years outdated
- You will need to have by no means owned a house or any curiosity in a house wherever on the earth
- You will need to reside within the residence as your principal residence inside 9 months of the acquisition
- And, right here’s the kicker, your partner or common-law companion should additionally by no means have owned a house when you’ve been collectively
That final level journeys up lots of {couples}. In case your companion owned a house earlier than you bought collectively, you’re within the clear. But when both of you owned a property whereas in a relationship with the opposite, even when it was abroad, you’re disqualified.
I’ve needed to ship that disappointing information greater than as soon as. It’s a harsh line, however that’s the rule.
Actual property lawyer Maria Berenbaum notes:
“The most recent addition is {that a} purchaser should be both a Canadian Citizen or have Everlasting Resident standing. We had a file not too long ago the place spouses purchased a home together- they’re each first time homebuyers however she doesn’t have her PR but in order that they received solely half the rebate. As soon as she will get her papers she will apply for the rebate inside 30 days of getting a affirmation of residency, very quick window of alternative.”
Maria went on to say she usually hears feedback like, “How would they know if I owned one thing again in X? The reply is all authorities companies are inter-connected. Subsequently, when they’re making use of for immigration and put of their utility that they owned a house again residence, it could set off a re-assessment, along with penalties.”
How does the RRSP House Patrons’ Plan outline a first-time homebuyer?
The HBP is a well-liked possibility for patrons who wish to faucet into their RRSP financial savings, as much as $60,000 per couple, to assist with a down fee.
Fortunately, this program is extra forgiving than the LTT rebate.
The four-year look-back rule
To qualify:
- You will need to not have lived in a house that you simply (or your partner/common-law companion) owned within the present yr or the 4 previous calendar years
- You want a signed settlement to purchase or construct a qualifying residence
- You will need to intend to make that residence your principal residence inside one yr
- You should be a resident of Canada on the time of the withdrawal and while you purchase the house
So sure, you’ll be able to technically qualify once more even in case you’ve owned property earlier than. So long as you (and your present partner or companion) haven’t lived in an owned residence in that four-year window, you should still be eligible.
I name this the “recent begin” clause. It’s significantly helpful for individuals who offered a house years in the past and have been renting since.
How does the First House Financial savings Account outline a first-time homebuyer?
The FHSA is the brand new child on the block, and truthfully, it’s a game-changer. It combines the tax perks of an RRSP and a TFSA, and allows you to contribute as much as $40,000 towards your first residence buy.
However, just like the HBP, it additionally makes use of a model of the four-year lookback rule.
Much like HBP, however tied to possession and occupancy
To open and use an FHSA:
- You should be between 18 and 71 years outdated and a Canadian resident
- You will need to not have owned or collectively owned, or lived in, a qualifying residence within the calendar yr earlier than you open the FHSA or throughout the earlier 4 calendar years
- This rule additionally considers property owned by your partner or common-law companion that you simply lived in
The FHSA’s definition of a first-time homebuyer is nearly similar to the HBP’s, however there’s one nuance: the timing begins earlier than the account is opened. Meaning it’s a must to meet the definition on the time you open the FHSA, not simply while you use it.
That is essential. We inform our shoppers: in case you’re even considering about shopping for your first residence within the subsequent few years, open your FHSA sooner moderately than later, even with a minimal contribution, to begin that eligibility clock.
How do the definitions evaluate?
Let’s stack them aspect by aspect so you’ll be able to see the place issues align, and the place they don’t.
| Program | By no means Owned Anyplace | 4-12 months Lookback | Partner/Accomplice Possession Included | Notable restriction |
| LTT Rebate (ON) | Sure | No | Sure | Ever owned (wherever) = disqualified |
| HBP (RRSP) | No | Sure | Sure | 4-year rule based mostly on occupancy |
| FHSA | No | Sure | Sure | 4-year rule based mostly on possession + occupancy |
The important thing takeaway? The LTT rebate is the strictest. HBP and FHSA are extra versatile, particularly in case you’ve taken a break from homeownership or not too long ago separated from a companion who had a house.
Our recommendation
Don’t assume you’re (or aren’t) a first-time purchaser till we actually have a look at the main points. Every program performs by its personal guidelines, and timing, relationship historical past, and previous possession all matter.
Right here’s what we advocate:
- Discuss to a mortgage knowledgeable early: They will stroll you thru every of those definitions based mostly in your private historical past
- Open your FHSA early if there’s any likelihood you’ll purchase within the subsequent few years. You’ll be glad you probably did
- Be sincere with your self (and your companion) about your possession historical past, even that trip property from 15 years in the past would possibly depend
- Don’t depart cash on the desk. We’ve seen shoppers qualify for advantages they didn’t know they have been entitled to, and others miss out as a result of they made assumptions
Does first-time purchaser standing matter for mortgage functions?
Really, for an insured mortgage, it can matter in case you are a primary time homebuyer.
Repeat patrons are eligible for a 30-year amortization with mortgage insurance coverage solely when buying newly constructed houses.
First-time homebuyers are eligible no matter whether or not they’re shopping for a brand new or resale residence.
Repeat patrons buying resale (current) houses are usually not eligible for a 30-year amortization with mortgage insurance coverage—the utmost stays 25 years in these circumstances.
Whether or not you’re shopping for your very first residence or simply your first shortly, realizing which applications you qualify for can prevent hundreds, and make your homeownership journey a lot smoother.
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Final modified: September 11, 2025
