First-Time Homebuyer Guide for Toronto: Programs, Rebates, and Costs
Toronto is the only major city in Ontario that charges both a provincial and a municipal land transfer tax, but first-time buyers can also claim rebates on both, worth up to $8,475 combined. Layered with federal programs like the FHSA and RRSP Home Buyers' Plan, Toronto first-time buyers have access to some of the most substantial savings tools available anywhere in Canada.
Toronto's Land Transfer Tax Rebate (Provincial + Municipal)
First-time buyers in Toronto can claim up to $4,000 off Ontario's provincial land transfer tax and up to $4,475 off Toronto's municipal land transfer tax, for a combined maximum rebate of $8,475. Because Toronto charges land transfer tax at both the provincial and municipal level, buyers there pay roughly double what they would elsewhere in Ontario for the same purchase price — but they also receive both rebates if they qualify.
As an example, based on the published marginal rate brackets both levels use, a home purchased at the first quarter 2026 average condo price of $618,484 would generate combined land transfer tax of approximately $17,689 before rebates. After applying the full $8,475 in combined first-time buyer rebates, the buyer would owe roughly $9,214. For homes priced at $400,000 or less, the combined rebates fully cover the combined tax, meaning eligible first-time buyers pay $0 in land transfer tax.
To qualify, you generally must be a Canadian citizen or permanent resident, at least 18 years old, have never owned a home anywhere (and your spouse must not have owned a home while being your spouse), and occupy the property as your principal residence within nine months of closing. The rebate is typically claimed automatically by your real estate lawyer at closing, though you have up to 18 months after purchase to apply if it's missed.
FHSA and RRSP Home Buyers' Plan: Building Your Down Payment
The First Home Savings Account (FHSA) lets first-time buyers contribute up to $8,000 a year, to a lifetime maximum of $40,000, with tax-deductible contributions and tax-free withdrawals for a qualifying home purchase. The RRSP Home Buyers' Plan (HBP) separately allows first-time buyers to withdraw up to $60,000 from their RRSP tax-free — $120,000 for a couple — provided the funds are repaid over 15 years.
Since 2023, both programs can be used together on the same purchase, meaning a single buyer can access up to $100,000 in tax-advantaged down payment funds, or $200,000 for a couple. Unlike the HBP, FHSA withdrawals don't need to be repaid. One planning detail worth noting: FHSA funds generally need the account open for a period before a qualifying withdrawal, and HBP funds need to sit in your RRSP for at least 90 days before withdrawal, so opening both accounts well ahead of your purchase timeline matters.
There's also a federal Home Buyers' Tax Credit worth $10,000, which translates to a $1,500 non-refundable tax credit at the federal rate, claimed directly on your tax return for the year you bought the home — no separate application required.
How Much Down Payment You'll Need in Toronto
Minimum down payment in Canada is set federally on a sliding scale based on purchase price, not a flat percentage. With Toronto's average selling price at $1,069,700 as of May 2026 per TRREB, most Toronto buyers fall into the tier requiring more than the minimum 5%.
| Purchase Price | Minimum Down Payment |
|---|---|
| Under $500,000 | 5% of the purchase price |
| $500,000–$1,499,999 | 5% on the first $500,000, plus 10% on the remainder |
| $1,500,000 and above | 20% (mortgage insurance is not available above this threshold) |
For example, on a $618,484 condo — roughly the GTA average condo price in the first quarter of 2026 — the minimum down payment would be $25,000 (5% of $500,000) plus $11,848 (10% of the remaining $118,484), for a total of about $36,848.
This is general information, not personalized financial or tax advice. Land transfer tax calculations, program eligibility, and closing costs can vary based on your specific situation — confirm current figures with your real estate lawyer or a qualified mortgage professional before making a purchase decision.
Steps to Buy Your First Home in Toronto
- Open an FHSA as early as possible. Contribution room begins accumulating the moment the account is open, even if you don't plan to buy for several years.
- Get pre-approved for a mortgage. This confirms your realistic budget and requires passing the federal mortgage stress test, which applies regardless of your down payment size.
- Confirm your first-time buyer eligibility for rebates. Review the requirements for the Ontario LTT rebate, Toronto MLTT rebate, FHSA, and HBP, since eligibility rules differ slightly between programs.
- Budget beyond your down payment. Closing costs in Ontario typically run 1.5% to 4% of the purchase price, covering legal fees, land transfer tax (net of rebates), and adjustments.
- Work with a real estate lawyer to claim your rebates at closing. Most rebates are applied automatically if your lawyer files the correct paperwork, reducing your cash needed at closing rather than requiring a separate claim afterward.
Frequently Asked Questions
How much rebate can Toronto first-time buyers get on land transfer tax?
Up to $4,000 off the provincial land transfer tax and up to $4,475 off Toronto's municipal land transfer tax, for a combined maximum of $8,475. Homes priced at $400,000 or less generally have their combined land transfer tax fully covered by these rebates for eligible first-time buyers.
What is the FHSA and how does it help first-time buyers?
The First Home Savings Account lets first-time buyers contribute up to $8,000 a year, to a $40,000 lifetime maximum, with tax-deductible contributions and tax-free withdrawals when used for a qualifying first home purchase. It can be combined with the RRSP Home Buyers' Plan for even more down payment funds.
How much down payment do I need to buy a home in Toronto?
It depends on the purchase price. Homes under $500,000 require a minimum 5% down payment; homes between $500,000 and $1,499,999 require 5% on the first $500,000 plus 10% on the remainder; homes at $1,500,000 or above require a minimum 20% down payment.
Can I use the FHSA and Home Buyers' Plan together?
Yes. Since 2023, both programs can be used on the same home purchase, allowing a single buyer to access up to $100,000 in tax-advantaged funds, or $200,000 for a couple. The FHSA doesn't require repayment, while HBP withdrawals must be repaid to your RRSP over 15 years.
Who qualifies as a first-time home buyer in Ontario?
Generally, you qualify if you and your spouse have never owned a home anywhere, you're a Canadian citizen or permanent resident, and you intend to occupy the home as your principal residence. Exact eligibility criteria can differ slightly between the FHSA, HBP, and land transfer tax rebates, so it's worth confirming each program's specific requirements.
Plan Your Full Budget
Land transfer tax is only one part of your closing costs. Our Ontario land transfer tax guide covers the calculation in more detail, and our CMHC insurance guide explains what to expect if your down payment is below 20%.