Unlocking Homeownership: New Incentives for First-Time Buyers in 2025
If you’re a first-time homebuyer in Canada, 2025 is shaping up to be a promising year. Over the last six months, several new and expanded initiatives have been introduced to help Canadians step into homeownership. From tax credits to extended amortization options, here’s a roundup of what you need to know.
- First Home Savings Account (FHSA)
Launched in April 2023, the FHSA combines the best features of an RRSP and a TFSA, specifically designed for first-time homebuyers. You can contribute up to $8,000 per year, with a lifetime maximum of $40,000. Contributions are tax-deductible, and withdrawals for your home purchase are tax-free, making this a powerful savings tool for building your down payment.
- Home Buyers’ Plan (HBP) – Enhanced Limits
The HBP now allows you to withdraw up to $60,000 from your RRSP, up from the previous $35,000 limit. Couples can combine their withdrawals for a total of $120,000. This expanded program offers even more flexibility to boost your down payment and make homeownership more accessible.
- 30-Year Amortization for First-Time Buyers
Starting August 1, 2024, first-time buyers purchasing new homes can now opt for a 30-year amortization period instead of the standard 25 years. This change helps lower monthly mortgage payments, giving new buyers a more affordable pathway to homeownership.
- Increased Insured Mortgage Cap
The cap for insured mortgages has been raised from $1 million to $1.5 million, accommodating higher home prices. This change means more homes are eligible for mortgage insurance with a minimum down payment of 5%, expanding options for first-time buyers.
- Expanded GST/HST New Housing Rebate
As of March 20, 2025, first-time buyers can now access a full rebate of the federal portion of the GST or HST on new homes priced up to $1 million. For homes between $1 million and $1.5 million, the rebate phases out gradually. This initiative significantly lowers the upfront costs of buying a newly built home.
- Home Buyers’ Tax Credit – Doubled
The Home Buyers’ Tax Credit has been doubled from $5,000 to $10,000, providing a non-refundable tax credit of up to $1,500. This credit is available to first-time buyers purchasing a qualifying home, offering a nice financial boost at tax time.
- Alberta-Specific Incentives
For buyers in Alberta, there are some unique advantages: Alberta does not have a land transfer tax, offering substantial savings compared to other provinces. Various municipal and regional programs may also be available, so it’s worth checking local resources to see if there’s additional support in your area.
- Discontinuation of the First-Time Home Buyer Incentive (FTHBI)
It’s worth noting that the FTHBI, which offered shared-equity mortgages with the federal government, is no longer accepting new applications as of March 21, 2024. However, with the new and enhanced programs listed above, there are still plenty of ways to find support for your first home purchase.
The last six months have brought a wave of new incentives and updates for first-time homebuyers across Canada. Whether you’re looking to save for a down payment, reduce your monthly costs, or take advantage of rebates and tax credits, these programs can help make your homeownership dreams a reality.
Navigating all these options can be complex, but you don’t have to do it alone. Working with a mortgage broker can ensure you’re making the most of every opportunity and finding the right mortgage to fit your goals. Feel free to reach out to Patricia McKean at 403.875.2969 patricia@patriciamckean.ca
Happy house hunting!