Toronto First-Time Homebuyer Tax Programs 2025: Four Ways to Save Big on Your Home Purchase

Toronto First-Time Homebuyer Tax Programs 2025 happy homebuyers

Toronto First-Time Homebuyer Tax Programs 2025: Four Ways to Save Big on Your Home Purchase

If you’re planning to buy your first home in Toronto in 2025, you’re in luck! There are several tax programs designed specifically to make homeownership more affordable for first-time buyers. From credits that help with closing costs to savings accounts that grow tax-free, these programs can provide the financial boost you need to take the leap into homeownership.

As an experienced Toronto realtor, I’m here to break down the Toronto first-time homebuyer tax programs 2025 and show you how to take full advantage of them. Let’s dive in!

Top Tax Programs for First-Time Homebuyers in 2025

  1. First-Time Home Buyers’ Tax Credit

This non-refundable tax credit is designed to help first-time homebuyers offset the costs associated with purchasing a home.

  • What It Is: A credit of up to $1,500 to reduce your tax payable.
  • Eligibility: You or your spouse/common-law partner must not have owned a home in the past five years.
  • How to Claim: Include the credit on your 2024 tax return.

Pro Tip: Combine this credit with other programs for even more savings.

  1. Home Buyers’ Plan (HBP)

The HBP allows first-time buyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) without immediate tax implications.

  • What It Offers: Withdraw up to $60,000 tax-free for a down payment.
  • Extended Grace Period: Withdrawals made by the end of 2025 come with an additional three years before repayment begins.
  • How It Helps: Provides immediate funds for your home purchase without depleting your savings.

Tip: Ensure you’re prepared to meet the repayment schedule to avoid penalties.

  1. First Home Savings Account (FHSA)

This newly introduced FHSA program combines the benefits of an RRSP and TFSA to help you save for your first home.

  • What It Is: Save up to $8,000 annually, with a lifetime limit of $40,000. Contributions are tax-deductible, and withdrawals are tax-free for home purchases.
  • Why It’s Great: Offers tax-free growth and a significant financial boost for first-time buyers.
  • Maximizing Benefits: Open an FHSA as early as possible to take advantage of annual contribution limits.

Toronto Moving Expense Deduction first-time homebuyers

  1. Moving Expense Deduction

If you’re relocating at least 40 km closer to work or school, you may be able to deduct your moving expenses.

  • Eligible Costs: Transportation, storage, and fees related to selling your current residence.
  • How to Claim: File the deduction on your tax return to reduce your overall taxable income.

Pro Tip: Keep all receipts and documentation to ensure a smooth claims process.

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Why These Programs Matter: Toronto First-Time Homebuyer Tax Programs 2025

Buying your first home in Toronto can feel overwhelming, but these available Toronto first-time homebuyer tax programs 2025 make the process more manageable. By reducing costs and offering financial flexibility, these programs can help you achieve your dream of homeownership faster than you might think.

Next Steps

Navigating the Toronto real estate market as a first-time homebuyer doesn’t have to be stressful. With over 16 years of experience, I’m here to guide you every step of the way. From finding your dream home to maximizing your tax savings, I’ve got you covered.

Ready to take the first step toward homeownership? Contact me now to get started.

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