First Time Home Buyers in Toronto: Rebates, Savings Plans and the Real Budget

Why a first purchase in Toronto costs more at the door

Two things set a City of Toronto purchase apart from one almost anywhere else in Ontario. The first is a second land transfer tax, charged by the City on top of the provincial one. The second is that the City also runs its own first time buyer rebate, so the extra tax comes with extra relief.

Search results for “first time home buyer Toronto” are dominated by that pair for good reason. It is the largest single cost after the down payment and the one most often misunderstood. This guide starts there, then moves through the down payment, the stress test, the amortization rules and the two registered savings plans, using TRREB prices for the City of Toronto in August 2026.

All of it is general information. Your lawyer, your mortgage professional and an accountant should confirm how each rule applies to you before you rely on it.

Two land transfer taxes and two rebates

Ontario charges land transfer tax on every purchase in the province. The City of Toronto charges its municipal land transfer tax, often shortened to MLTT, on property in the City of Toronto. Both are payable when the transfer is registered on closing day, so your lawyer collects them from you before closing.

Below $2,000,000 the two taxes use the same brackets: 0.5 percent up to $55,000, 1 percent to $250,000, 1.5 percent to $400,000 and 2 percent above that. For a home with one or two single family residences, the City added steeper rates above $3,000,000 from April 1, 2026, which will not touch most first purchases.

The rebates are where first time buyers recover ground:

Rebate	Maximum	What it works out to
Ontario land transfer tax refund	$4,000	Ontario says a qualifying buyer pays no provincial tax on the first $368,000
City of Toronto MLTT rebate	$4,475	Equal to the full City tax on a $400,000 purchase

Here is what that does at August 2026 prices in the City of Toronto:

Purchase price	Ontario tax	Toronto tax	Combined	After both full rebates
$550,000	$7,475	$7,475	$14,950	$6,475
$661,650	$9,708	$9,708	$19,416	$10,941
$770,000	$11,875	$11,875	$23,750	$15,275
$1,170,000	$19,875	$19,875	$39,750	$31,275

The first row is the TRREB median for a condo apartment, the second the condo townhouse median, the third the median across all home types and the last the detached median, all for August 2026. Our land transfer tax calculator for Toronto runs any other price and our post on land transfer tax in Toronto sets out the brackets in full.

Who qualifies for the rebates

Ontario and the City write their rules separately, but the conditions line up closely. To claim either one:

• You must be at least 18.
• You must occupy the home as your principal residence within nine months of the transfer.
• You must never have owned a home or any interest in one anywhere in the world at any time.
• If you have a spouse, they must not have owned a home anywhere in the world while they were your spouse.
• You must be a Canadian citizen or permanent resident. Both programmes give a buyer who gains that status within 18 months of the transfer a route to apply.

Two details matter in practice. Where one buyer on title qualifies and another does not, Ontario reduces its refund in proportion to the share bought by the qualifying buyer. And both rebates are normally claimed by your lawyer at registration, so they come off the tax you pay on closing. If that step is missed, each programme allows an application within 18 months of the transfer and the City charges a processing fee on late claims.

The down payment at Toronto prices

The Financial Consumer Agency of Canada sets out the federal minimum by price band:

• 5 percent of a purchase price of $500,000 or less
• 5 percent of the first $500,000, plus 10 percent of the part above $500,000, for prices up to $1.5 million
• 20 percent of the whole price at $1.5 million or more

Applied to the TRREB medians for the City of Toronto in August 2026:

Home type, August 2026 median	Price	Minimum down payment
Condo apartment	$550,000	$30,000
Condo townhouse	$661,650	$41,165
All home types	$770,000	$52,000
Freehold townhouse	$962,000	$71,200
Detached	$1,170,000	$92,000

With less than 20 percent down the mortgage must be insured against default. The Financial Consumer Agency of Canada puts premiums at 0.6 percent to 4.5 percent of the mortgage amount. Ask your lender how the premium is charged and what part of it, if any, is due in cash on closing. Our post on closing costs when buying in Toronto lists that and every other item your lawyer will ask you to fund.

Since December 15, 2024, the federal government has allowed insured mortgages on homes priced up to $1.5 million, up from $1 million before. For a Toronto buyer that matters most on semi-detached houses and freehold townhouses, whose August 2026 medians sat just under $1 million.

The stress test sets the ceiling

Your lender will approve you against a qualifying rate, not the rate on your contract. The Financial Consumer Agency of Canada states that banks use the higher of 5.25 percent or your negotiated rate plus 2 percent, for insured and uninsured mortgages alike. OSFI describes the 2 percent as a buffer and the 5.25 percent as a floor.

A simple illustration: offered a five year fixed rate of 4.5 percent, you must show you could carry payments at 6.5 percent. Offered 3 percent, you qualify at 5.25 percent, because the floor is higher than 5 percent.

The practical effect is that the stress test, rather than the down payment, is often what limits a Toronto first time buyer. Get a written pre-approval before you view anything seriously and read our post on the mortgage stress test in Toronto for how lenders apply it. The Toronto mortgage calculator shows payments at both rates.

The 30 year amortization for first time buyers

The amortization is the number of years it takes to pay the mortgage off in full. The Financial Consumer Agency of Canada says that where your down payment is below 20 percent, the maximum is 30 years if you are a first time buyer or buying a new build and 25 years in every other case. With 20 percent or more down, your lender sets the limit.

Five extra years lower each payment, which can make the stress test easier to pass. They also mean you pay interest for longer, so the total cost of borrowing rises. Ask your mortgage professional to show both schedules side by side before you choose.

The FHSA and the Home Buyers’ Plan

Canada has two registered plans aimed at a first purchase. They work differently and can be used together on the same home.

First Home Savings Account. The Canada Revenue Agency gives you $8,000 of participation room in the year you open your first FHSA, with a lifetime limit of $40,000. Unused room can carry forward, to a maximum of $8,000 a year. Contributions are deductible from your income and a qualifying withdrawal to buy your first home is not repaid. Room only begins once the account is open, so opening one early costs nothing and starts the clock.

For the FHSA, a first time buyer is someone who did not live, as a principal residence, in a home they or their current spouse owned at any time in the current year before opening the account or in the four preceding calendar years. That is a different test from the land transfer tax rebates, which look back over your whole life.

RRSP Home Buyers’ Plan. You can withdraw up to $60,000 from your RRSPs to buy a qualifying home and repay it over 15 years. For a first withdrawal between January 1, 2026 and December 31, 2028, the Canada Revenue Agency defers the start of repayment to the fifth year after the withdrawal year, so a 2026 withdrawal is first repaid in 2031.

Our post on the FHSA and the Home Buyers’ Plan in Toronto works through the timing rules. An accountant should confirm your own contribution room and eligibility before you withdraw.

If you are buying new from a builder

The rebates above apply to resale and new homes alike. A new home also carries HST and first time buyers have two further rebates to consider.

The federal first time home buyers’ GST/HST rebate covers 100 percent of the GST (or the federal part of the HST) on a qualifying new home valued up to $1 million, with reduced relief between $1 million and $1.5 million. The Canada Revenue Agency says the agreement with the builder must be signed on or after March 20, 2025 and before 2031 and the buyer must not have lived in a home they or their spouse owned in the current year or the previous four. In Ontario a first time buyer may also recover up to $80,000 of the 8 percent provincial part of the HST.

Those rules have more conditions than fit here. Our guide to new construction in Toronto covers them along with Tarion, deposits and the condo cooling off period.

What a first budget reaches in Toronto

Home type decides more than postal code. In August 2026 the City of Toronto medians ran from $550,000 for a condo apartment to $1,170,000 for a detached house.

At the community level, TRREB’s figures for April to June 2026 show several areas with all property type medians near the condo apartment figure: Islington-City Centre West at $594,500, Waterfront Communities C8 at $597,500, Waterfront Communities C1 at $610,000, Bayview Village at $622,500 and Willowdale East at $630,000. Our guides to the Downtown Waterfront, Bayview Village, Willowdale and Islington Village describe each area and Toronto house prices tracks the monthly numbers.

On a condo purchase, have your lawyer review the status certificate before you waive conditions. Our post on the condo status certificate in Toronto explains what it shows and the fee cap.

A sequence that works

1. Open an FHSA as soon as you think you might buy, so room starts to build.
2. Get a written pre-approval that states the qualifying rate, the amortization and the insurance premium.
3. Price the closing separately. Land transfer taxes after rebates, legal fees, title insurance and any cash your lender needs on closing.
4. Retain a real estate lawyer before you make an offer and ask them to confirm they will claim both rebates on registration.
5. Then view homes in the price range the pre-approval supports.

Mistakes we see first time buyers in Toronto make

Forgetting the City tax. Buyers moving from elsewhere in Ontario often budget for one land transfer tax. On a $770,000 purchase the second one adds $11,875 before the rebate.

Assuming the rebates cover everything. They are capped. Above $400,000 the City rebate stops growing and on the August 2026 all types median a first time buyer still pays $15,275 in combined tax.

Mixing up the definitions. Owning a condo years ago rules you out of both land transfer tax rebates for life, yet once the four calendar year lookback has passed you may still qualify for an FHSA. Check each programme on its own terms.

Treating the pre-approval as a promise. The lender still has to approve the specific property and a condo with weak finances or a special assessment can change that.

If you want to see what these rules mean for a particular Toronto home, contact us or read how we work with buyers. We will go through the figures with you before you commit to anything.