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The First-Time Home Buyer’s Tax Credit – Everything you need to know (2026)

Canada’s First-Time Home Buyer’s Tax Credit can help you get up to $1,500 cash back when you file your end of year taxes. In this article we take a look at how you can access this credit

Steven Jackson Dec 29, 2025 12 min read
First Time Home Buyers Tax Credit

Canada’s First-Time Home Buyer’s Tax Credit can help you get up to $1,500 cash back when you file your end of year taxes.

In this article we take a look at how you can access this credit.

More specifically we look at:

What is the First-Time Home Buyers’ Tax Credit?

The First-Time Home Buyers’ Tax Credit (HBTC) is a non-refundable, federal tax credit in Canada. This means that the HBTC reduces the amount of income tax you owe, but it does not result in a cash refund if your tax payable is already zero. The way it works is that the government lets you claim a $10,000 Home Buyers’ Amount on your tax return. Think of it like a $10,000 “tax coupon” however, instead of giving you cash, it reduces the federal tax you owe on that $10,000 by 15%, which equals $1,500.

For example, suppose you earn $100,000 and, after deductions, your federal tax bill comes out to $18,000. If you qualify for the First-Time Home Buyers’ Tax Credit and claim the full amount, you receive a $1,500 reduction in federal tax. This lowers your tax payable from $18,000 to $16,500. However, If instead your tax bill were only $1,200, the credit would simply reduce it to zero. You would not get the $300, as a refund.

How the First-Time Home Buyers’ Tax Credit works

You do not need to apply or get approval for the First-Time Home Buyers Tax Credit. You simply need to claim the credit as part of your annual tax filing process.

To claim the First-Time Home Buyers’ Tax Credit, enter the $10,000 Home Buyers’ Amount on Line 31270 of your income tax return for the year you purchased your first home.

You won’t get the full $10,000 back. Instead, the government calculates the credit at the lowest federal personal tax rate, which is currently 15%. Thus, the credit reduces your federal taxes owed by $1,500 (15% of $10,000).

If you bought the home with a spouse or common-law partner, you can split the credit between you and your partner. However, the total claimed amount cannot exceed $10,000. As already mentioned, because the HBTC is a non-refundable credit, it can only reduce your taxes to zero. You will not receive any extra cash if your tax bill is smaller than the credit.

Be sure to keep all your home purchase documents, like your purchase agreement and proof that the home became your principal residence, in case the CRA asks for proof of eligibility.

Note

Even if someone earns a very high income and pays a higher marginal tax rate (like 50%), the First-Time Home Buyers’ Tax Credit doesn’t scale up with their income. It’s always calculated at the lowest federal rate (15%), so the maximum benefit is still $1,500, not $5,000 or more.

The idea is to keep the credit fair and predictable for everyone, rather than giving bigger tax savings to high earners.

Who’s eligible for the First-Time Home Buyer’s Tax Credit?

You are eligible for the First-Time Home Buyers’ Tax Credit if you meet the following three conditions:

  1. You are a first-time home buyer: You (and your spouse or common-law partner, if applicable) did not live in a home you owned in the current year or in the four previous years.
  2. You purchased a qualifying home: You must intend to make the home your principal residence within one year of buying it. This applies to houses, condos, or other eligible dwellings in Canada.
  3. You actually bought the home: You must complete the home purchase during the tax year you claim the credit.

There are also special rules for persons with a disability. These state that if you (or a related person) are eligible for the Disability Tax Credit (DTC), you can claim the First-Time Home Buyers’ Tax Credit even if you’ve previously owned a home. In this case, you must still intend to make the home your (or the eligible person’s) principal residence within one year of purchase. This rule helps buyers acquire homes that are more accessible or better suited to their needs.

Buyers Tip

The HBTC must be claimed in the same tax year that you purchase your first home. This means that if you forget to claim it when filing your return for that year, you cannot claim it in a later year. However, you can usually amend your tax return for that year to include the credit.

In Canada, you can generally request a change to your tax return for up to 10 previous years through the CRA’s “Change my return” process.

So while you can’t claim it in a future year’s return, you can fix it by amending the original year’s return and still get the credit.

Eligible dwellings for the First-Time Home Buyers’ Tax Credit

You will only be able to apply for the First-Time Home Buyers’ Tax Credit if you purchase a qualifying home, also called an eligible dwelling. Eligible dwellings include houses, condominiums, mobile homes, or any other housing unit in Canada that is intended to be your principal residence within one year of purchase.

The key points are:

  • The home must be located in Canada.
  • It must be newly purchased, either from a builder or a previous owner.
  • The property can be a single-family home, townhouse, condo, or even a mobile home, as long as it will serve as your primary residence.
  • The home cannot be solely for rental, vacation, or investment purposes. It must be where you (or your spouse/common-law partner) will live.

This ensures that the credit goes only to first-time buyers acquiring a home they will actually live in, rather than investors or buyers purchasing secondary properties.

Other assistance programs for Canadian Home Buyers

In addition to the First-Time HBTC, several federal, provincial, and municipal programs can help you with the costs of buying a home. These include:

  • RRSP Home Buyers’ Plan (HBP): This program allows eligible buyers to withdraw up to $60,000 per individual (or $120,000 per couple) from their RRSP (tax-free). You must repay the amount within 15 years to your RRSP.
  • First Home Savings Account (FHSA): A tax-free savings account where first-time home buyers can contribute up to $8,000 per year (maximum $40,000) to save for a home, with contributions being tax-deductible and withdrawals tax-free for a qualifying home purchase.
  • The GST/HST new housing tax rebate: Lets you recover part of the GST or HST paid on the purchase price or cost of building a new home, making new homes more affordable.
  • Land Transfer Tax: Some provinces offer rebates or exemptions on land transfer taxes for first-time home buyers, reducing upfront costs when buying a property. While Quebec does not provide a general first-time buyer rebate, the City of Montreal offers a municipal program that can reimburse the “welcome tax” for eligible first-time buyers, such as families with children, under certain conditions.

Frequently Asked Questions

The First-Time Home Buyers’ Tax Credit (HBTC) can lower your federal taxes by up to $1,500. Here’s how it works: you can claim up to $10,000 as the Home Buyers’ Amount on your tax return. The government calculates the credit at the lowest federal personal tax rate (15%), so 15% of $10,000 equals $1,500. This amount is subtracted directly from the federal taxes you owe for the year you buy your first home. If your federal tax owing is less than $1,500, the credit can only reduce your tax to zero, you won’t receive the remaining amount as a refund, because it’s a non-refundable tax credit.

You cannot claim the credit on a future year’s tax return. However, you can amend your original tax return for the year you purchased your home to include the credit. In Canada, the CRA allows you to request changes for up to 10 previous tax years using the “Change my return” feature in your CRA My Account or by submitting Form T1-ADJ by mail. This way, you can still receive the tax benefit even if you forgot to claim it initially.

Looking to buy a property in Quebec?

Are you looking to buy a property in Quebec? The best realtors know how to stretch your budget and get the most value from your purchase. They leverage their networks of financial advisors, mortgage experts, and industry connections to make sure you get the best deal for you. That’s why it’s crucial to work with a specialist realtor. One who truly understands your needs and the market.

In Quebec, there are over 17,000 agents. At Immovision, we scan the market to find the top-performing, active agents who are the perfect fit for your specific project. Once we identify them, we connect you directly with these agents so you can make confident, informed decisions.

Find your ideal agent today and maximize your home-buying power.

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