Buying a Home in Canada: The 2026 Step-by-Step Guide

Q: Do first-time buyers get land transfer tax rebates?

Yes in most provinces: Ontario (up to $4,000), BC (up to $8,000), Toronto municipal rebate (up to $4,475). Alberta and Saskatchewan typically have none.

Q: Can newcomers or international students use FHSA/HBP?

Yes — if you're a permanent resident or citizen and meet the 'first-time buyer' definition (no home ownership in the last 4 years). Build credit early with utilities/secured cards.

Buying your first (or next) home in Canada? This unbiased guide walks through the full process — from incentives and pre-approval to closing costs and beyond. No ads, no tracking, no agent promotions.

Financial Planning & Government Incentives

Maximize savings before shopping. Use tax-advantaged accounts and understand borrowing limits.

First Home Savings Account (FHSA)

Contribute $8,000/year (lifetime $40,000) tax-deductible; withdraw tax-free for down payment. Combine with HBP.

Home Buyers' Plan (HBP)

Withdraw up to $60,000 tax-free from RRSP; repay over 15 years. For first-time buyers only.

Down Payment Rules

Minimum: 5% on first $500k + 10% on remainder (up to $1.5M for insured mortgages). 20%+ avoids insurance.

Detailed breakdown: See our 2026 First-Time Home Buyers Guide .

Mortgage Pre-Approval & Stress Test

Get pre-approved to know your budget. Must pass stress test: qualify at contract rate + 2% or 5.25% benchmark (whichever higher).

Stress Test 2026

Ensures you afford payments if rates rise. No major changes — still contract +2% or 5.25% min.

Mortgage Options

Use a broker to compare banks/credit unions. Fixed vs variable; insured vs conventional.

Pre-Approval Validity

Typically 90–120 days. Locks rate shopping window.

Explore: Mortgage Options for First-Time Buyers or Top Financing 2026.

Property Search & Due Diligence

Use REALTOR.ca or local MLS. Always condition on inspection and appraisal.

Home Inspection

Essential — uncovers hidden issues (roof, foundation, plumbing).

Appraisal

Lender requires; ensures value matches price.

Market Research

Check comps, days on market, vacancy trends.

2026 Closing Costs & Land Transfer Tax by Province

Province	Land Transfer Tax	First-Time Buyer Rebate	Other Notes
Ontario	Progressive (up to ~2.5%+)	Up to $4,000	Toronto adds municipal LTT + up to $4,475 rebate
British Columbia	Progressive (1–3%+)	Up to $8,000 (property transfer tax)	Higher in Metro Vancouver
Alberta	None (only registration fees)	N/A	Lowest closing costs
Quebec	"Welcome Tax" ~0.5–1.5%	None standard	Municipal welcome tax

Estimates only — 1.5–4% total closing costs typical. Verify with provincial sites (Jan 2026).

Making an Offer & Negotiation

Work with a realtor or go private. Include conditions (financing, inspection, appraisal). Negotiate price, closing date, inclusions.

Closing & Post-Purchase

Pay closing costs (1.5–4%): land transfer tax, legal fees (~$1,200–$2,500), title insurance, adjustments. Move in, register utilities, claim HBTC ($1,500 tax credit).

Pro-Tip for Newcomers & First-Timers

Stack FHSA + HBP for max down payment boost. No Canadian credit? Build with secured card/utility payments. Check 2026 Immigration & Housing Impacts.

Frequently Asked Questions – 2026

Yes — stack them for maximum benefit: up to $40,000 tax-free from FHSA + $60,000 from RRSP via HBP. Both are designed for first-time buyers.

You must qualify at your contract rate + 2% or the Bank of Canada benchmark (currently 5.25%), whichever is higher. No major changes in 2026.

$35,000 total: $25,000 (5% on first $500k) + $30,000 (10% on the remaining $300k). This assumes an insured mortgage (<20% down).