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The New First-Time Buyer Incentives in Canada in 2025 (And What They Really Mean)

Buying your first home in Canada just got a little easier. In 2025, the federal and some provincial governments are rolling out new and improved incentives to help first-time buyers overcome today’s biggest challenges: saving for a down payment, affording monthly mortgage payments, and competing in high-cost markets.

If you’re feeling overwhelmed by real estate prices, interest rates, or how much you need to qualify- this article will walk you through what’s new, what’s real, and what it actually means for you.

✅ Here Are the New First-Time Buyer Programs in 2025

1. Enhanced First Home Savings Account (FHSA) Contribution Limits

In 2025, the annual contribution limit to the First Home Savings Account (FHSA) has increased from $8,000 to $10,000/year, giving you more tax-free room to save for your first home faster.

Why it matters:

  • Your contributions are tax-deductible (like an RRSP)
  • Withdrawals for your home are tax-free (like a TFSA)
  • You can now contribute up to $50,000 total over your lifetime

🧠 Tip: You can combine FHSA withdrawals with the RRSP Home Buyers’ Plan (HBP) for even more buying power.

📚 Source: Government of Canada, 2025a

2. New Federal Down Payment Match Program (Pilot)

Launched in select provinces in 2025, the Down Payment Match Program offers first-time buyers a government match of 5% (up to $25,000) toward a down payment if you meet income and purchase limits.

Example:
If you save $20,000, the government may add another $1,000–$5,000 toward your down payment- no interest, no repayment.

💡 This is not a loan or shared equity program- it’s a grant-style match.

📚 Source: Canada Mortgage and Housing Corporation (CMHC), 2025

3. Revamped Home Buyers’ Plan (RRSP Withdrawal Limit Increased)

You can now withdraw up to $45,000 (previously $35,000) from your RRSP tax-free to buy your first home, as long as you repay it within 15 years.

Why it helps:

  • Bigger withdrawals = more buying power
  • You can combine this with your partner’s RRSP and your FHSA for a massive boost to your down payment

📚 Source: Government of Canada, 2025b

4. Land Transfer Tax Rebates Expanded

Many provinces—including Ontario, British Columbia, and Nova Scotia—have increased their land transfer tax rebates in 2025.

ProvinceMax Rebate in 2024Max Rebate in 2025
Ontario$4,000$6,000
BC$8,000$10,000
Nova Scotia$3,000$4,500

🧾 Don’t forget: Municipal rebates may also apply depending on your city.

📚 Source: Provincial Real Estate Associations, 2025

5. Zero-Interest Mortgage Programs (Local Pilot Projects)

Some municipalities (including Halifax, Ottawa, and Winnipeg) are testing zero-interest loan programs to help first-time buyers bridge the down payment gap.

These are local pilot programs, so you’ll need to check with your city or region.

🤔 So, What Does All This Mean for You?

Here’s how these new 2025 incentives actually help you as a first-time buyer:

ChallengeHow the Incentives Help
Saving a big down paymentFHSA + RRSP withdrawal + down payment match
Affording closing costsLand transfer tax rebates
Lowering interest costsZero-interest loans in some areas
Making a smart investmentTax-sheltered savings + more buying power

🧠 Bottom line: If you plan wisely, you could stack $50K–$80K in combined buying power using these programs.

📝 Final Tips for First-Time Buyers in 2025

  • ✅ Open an FHSA now– even if you’re not ready to buy this year
  • 💬 Talk to a mortgage broker who understands the 2025 updates
  • 📍 Look for affordable-growth cities (like Moncton, Windsor, or Saskatoon)
  • 📄 Keep track of federal, provincial, and city-level programs

📚 References

Kaleylangille

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