First-Time Buyer Incentives in Canada
First-time buyersPart of the Coastal Blue mortgage guide
By Nick Atwal
2-Minute Summary
Under current federal and BC rules, these programs
continue to apply.
Federal tools include the First Home Savings Account (FHSA) and the Home Buyers’ Plan (HBP).
British Columbia buyers may also qualify for the Property Transfer Tax exemption.
Closing costs add up quickly and must be budgeted alongside incentives.
Combining incentives can maximize your down payment and reduce upfront costs.
Always check current thresholds and eligibility before making a decision.
Your Path to Smarter Home Financing
First Home Savings Account (FHSA)
The First Home Savings Account (FHSA) allows Canadians to contribute up to $8,000 per year (lifetime maximum $40,000 ). Contributions are tax-deductible, and withdrawals are tax-free when applied toward your first home.
Example: Vancouver Buyer
- Contributes $8,000/year for 5 years = $40,000
- Assuming 25% tax bracket, they also save ~$2,000 in taxes each year
- By year five, they have $40,000 + growth ready for a down payment
Nick's Note
I helped a Burnaby client maximise their FHSA over 4 years. Combined with their HBP withdrawal, they boosted their down payment to $75,000 — enough to buy in a better neighbourhood with lower monthly costs.
Want to know how much tax savings you could capture with an FHSA? I can run the numbers for you.
Also Read: The Hidden Costs of Homeownership →
Home Buyers Plan (HBP)
The Home Buyers’ Plan (HBP) lets you withdraw up to $60,000 from your RRSP (per buyer) for your down payment. Couples can combine for $120,000. You repay it over 15 years. For a first withdrawal from 2022 to 2028, repayments start in the fifth year after the withdrawal year; otherwise, in the second year.
Example: Vancouver Buyer
- Each withdraws $60,000
- Combined = $120,000
- No mortgage insurance on a home up to $600,000, since that’s a down payment of at least 20%
Nick's Note
A Surrey couple stacked the FHSA and HBP for a combined $110,000 down payment. That boosted their buying power and saved them thousands on mortgage insurance.
Also Read: Should I Buy Now or Wait for Rates to Drop? →
BC Property Transfer Tax (PTT) Exemption
The Property Transfer Tax (PTT) is a major upfront cost in BC.
- 1% on the first $200,000
- 2% on $200,000–$2M
- 3% above $2M
- +2% on portion above $3M (residential)
First-Time Buyer Exemption:
Full exemption on homes up to $835,000 (no tax on the first $500,000)
Partial exemption up to $860,000
Must be principal residence and land ≤ 0.5 hectares
| Standard PTT | First-time exemption |
|---|---|
| $7600 | $0 |
Nick's Note
A Langley buyer saved $8,000 in transfer tax using the exemption — money they put toward furnishing and moving expenses instead.
Also Read: How to Qualify for More (Without Stretching Too Far) →
Closing Costs in BC
In addition to down payments and incentives, closing costs typically run 1.5–4% of purchase price. These must be paid upfront.
Typical Closing Costs:
Legal & notary: $1,200–$2,500
Appraisal: $300–$500
Inspection: $400–$700
Title insurance: $250–$500
GST on new builds: 5% (first-time buyers of a new home up to $1M can get it all back, with partial relief up to $1.5M; other buyers may get a partial rebate under $450k)
Nick's Note
I worked with a North Vancouver buyer who underestimated closing costs by $12,000. Planning for them early meant they avoided dipping into credit cards at the last minute.
Want my one-page closing costs checklist? I can send it to make sure nothing sneaks up on you.
A Practical Way to Use Incentives
| Incentive | Benefit |
|---|---|
| FHSA | Tax-free savings up to $40k |
| HBP | Up to $60k per buyer from RRSPs |
| PTT Exemption | Saves thousands at closing |
| CMHC-Insured Mortgage | Allows smaller down payments |
Frequently Asked Questions
You Have Questions — We Have Answers!
First-Time Buyer Incentives
Can I combine FHSA and HBP?
Yes, most buyers can, which strengthens your down payment.
How much can the PTT exemption save me?
Up to $8,000, on homes priced up to $835,000 (a partial exemption up to $860,000).
Do incentives apply to both resale and new builds?
Yes, but new builds may also include GST.
Bottom Line
Incentives can be powerful, but they’re not automatic. The key is knowing which apply to your situation, how to stack them, and ensuring you still plan for closing costs.
Quick Takeaways:
FHSA, HBP, and PTT exemptions reduce upfront costs.
Combining incentives strengthens your down payment.
Closing costs remain significant — budget for them.
Always confirm thresholds before committing.
If you’d like, I can help map which incentives you qualify for under today’s BC rules so you know your true cash-to-close.
Your Path to Smarter Home Financing
Written by: Nick Atwal
Mortgage Broker at Coastal Blue Mortgages
BCFSA licence 504576
Top 5% of Dominion Lending Centres brokers in Canada, 2022Canadian Mortgage Professional Rising Star, 2023
Nick Atwal is a mortgage broker at Coastal Blue Mortgages, helping families and business owners with complex structuring and refinancing solutions. Recognized as one of Canada’s rising young mortgage professionals by Canadian Mortgage Professional, he focuses on thoughtful planning, clear communication, and long-term financial outcomes.
More about NickFirst Home Savings Account (FHSA) Guide
The FHSA combines the best features of RRSPs and TFSAs.
- Annual limit: $8,000
- Lifetime limit: $40,000
- Contributions = tax deduction
- Withdrawals = tax-free for qualifying home
Nick's Note
“A Vancouver teacher maxed her FHSA in 3 years and paired it with her partner’s HBP. Together, they had $90,000 for their first condo.”
Frequently Asked Questions
Can partners combine FHSAs?
Yes, both can withdraw.
What if I don’t buy?
Transfer to RRSP or RRIF.
Quick Takeaways:
Save $40k tax-free
Tax deduction now, tax-free later
Combine with HBP for more power
Home Buyers’ Plan (HBP) Explained
The HBP allows withdrawals from RRSPs for a down payment.
$60k max per buyer
Couples = $120k
Repay over 15 years
Nick's Note
A Surrey couple withdrew $70k from RRSPs under HBP. Combined with FHSA, they entered the townhouse market 2 years earlier than expected.
Frequently Asked Questions
Can I withdraw from multiple RRSPs?
Yes, as long as the total is $60k or less.
What if I miss repayment?
It’s added to taxable income.
Quick Takeaways:
Access up to $60k per person
Repay over 15 years
Works with FHSA
BC Property Transfer Tax (PTT) Exemption Guide
The PTT is one of the largest upfront costs in BC.
- 1% ≤ $200k,2% $200k–$2M,3% above $2M
- First-time exemption: no tax on the first $500k for homes up to $835k, partial up to $860k
Nick's Note
“A Richmond buyer avoided $7,500 in PTT thanks to the exemption — money used for renovations.”
Frequently Asked Questions
Can I combine exemptions?
No, only one program per purchase.
Do I need to apply?
Yes, via lawyer/notary at closing.
Quick Takeaways:
Saves thousands upfront
First-time exemption on homes up to $835k
Confirm eligibility before closing
Closing Costs in British Columbia
Closing costs = 1.5–4% of purchase price.
- Legal, notary, appraisal, inspection, title insurance, GST
Example: Vancouver Buyer
| Legal + title | Appraisal | Appraisal | PTT | GST |
|---|---|---|---|---|
| $2,000 | $400 | $500 | $12,000 (if not exempt) | $35,000 |
Nick's Note
A Coquitlam client nearly ran short on funds because they forgot about GST on a pre-sale. We built it into the budget early.
Frequently Asked Questions
Can I roll closing costs into mortgage?
Generally no.
Do all buyers pay PTT?
Unless exempt, yes.
Quick Takeaways:
1.5–4% of purchase price
Must be paid in cash
Plan early to avoid surprises