2025 First-Time Home Buyer Incentive Changes: Bigger Loans, Lower Barriers?

(As of July 2025) Buying your first home in Canada just became a bit easier — thanks to changes in federal and provincial support programs.

Following the end of the FTHBI (First-Time Home Buyer Incentive), several new and expanded initiatives have been introduced in 2025, including the enhanced FHSA contribution limits and targeted down payment support. This post breaks down the latest updates, eligibility rules, and how much more you can borrow now.
🏡 Canada’s Updated Homeownership Programs in 2025 – What’s New for First-Time Buyers?

Goodbye FTHBI: What Replaced the Shared Equity Program?

The federal First-Time Home Buyer Incentive (FTHBI) Verifiedly ended in March 2024. It was replaced by a combination of programs focused on affordability and flexibility, rather than shared equity ownership. Key replacements include:

• First Home Savings Account (FHSA): Annual limit increased to $10,000
• GST/HST Rebate Expansion: Now applies to homes up to $750,000 in some regions
• Local Grants: Municipal top-up incentives for down payments (e.g., Toronto’s $10K boost)

These changes aim to support buyers without requiring government co-ownership.

What Is the 2025 FHSA Contribution Limit and Why Does It Matter?

The FHSA, first launched in 2023, allows Canadians to save for their first home tax-free. In 2025, the annual contribution limit rose from $8,000 to $10,000, with a lifetime maximum of $40,000. Benefits include:

🟢 Tax-deductible contributions

Reduces your taxable income like an RRSP

🟢 Tax-free withdrawals

When used for a qualified home purchase

🟢 No repayment required

Unlike the RRSP Home Buyers’ Plan

This is one of the most generous home buying tools ever offered to Canadians.

Looking to Borrow More? Here’s How the 2025 Changes Help

Rising home prices continue to challenge first-time buyers. But with enhanced federal and local support, more Canadians can now afford larger down payments and qualify for bigger mortgages.

• 💰 FHSA + RRSP combo can now reach $75,000+ in down payment
• 📈 Higher purchase thresholds for rebates in BC, ON, and QC
• 🏦 Easier mortgage pre-approval through CMHC-backed lenders

📌 These changes are designed to lower the entry barrier to homeownership for young and middle-income Canadians.

Who Is Eligible for the New First-Time Buyer Support in 2025?

You may qualify for one or more programs if you meet the following criteria:

1. You are a Canadian resident aged 18+
2. You have not owned a home in the past 4 years (includes spouse/common-law ownership)
3. Your home purchase price is under $1,000,000
4. You plan to use the home as your primary residence

In some provinces, additional criteria apply (e.g., BC and Quebec have income caps for grant access).

How to Apply for First-Time Buyer Incentives in 2025

Application processes vary depending on the program:

• FHSA: Open via your bank or online investment platform
• GST/HST Rebate: File CRA form RC7000 after closing
• Municipal Top-Ups: Apply through your local housing office or city portal

💡 Combine multiple benefits when eligible — for example, use FHSA and GST rebate together.

Summary: 2025 Is a Better Year to Buy Your First Home

• FTHBI is gone, but more flexible supports have taken its place
• FHSA annual cap is now $10K, making savings faster
• New municipal and CRA-level grants support down payments
• You may qualify for more mortgage than you did in 2024

📍 Check eligibility by province and don’t miss your window to buy while programs are active.

Frequently Asked Questions

Q1. Is the First-Time Home Buyer Incentive (FTHBI) still available in 2025?

No. The FTHBI was discontinued in 2024. New support programs like FHSA and rebates have replaced it.

Q2. Can I use both FHSA and RRSP Home Buyers’ Plan?

Yes! In fact, combining them can significantly boost your down payment — up to $75K+ per couple.

Q3. Is the FHSA available through all banks?

Most major banks and online brokerages in Canada offer FHSA accounts. Availability may vary slightly.

Q4. Are there income limits to qualify?

Federal programs don’t have income limits, but some provincial/municipal grants may have thresholds.

Q5. What happens if I don’t buy a home with the FHSA?

You can transfer unused funds to an RRSP or RRIF tax-free before age 71.


Canada Revenue Agency

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