First-Time Buyer Incentive Programs in BC & Canada: Your Complete 2025 Guide to Saving Thousands
Introduction
Did you know that first-time home buyers in British Columbia can save over $75,000 by combining all available federal and provincial incentive programs? If you're dreaming of homeownership in Vancouver's competitive real estate market, understanding these programs isn't just helpful—it's essential to making your purchase affordable.
The path to homeownership in BC can feel overwhelming, especially when you're facing down payments, closing costs, and the reality of Vancouver's housing prices. But here's the good news: both the federal and provincial governments have created powerful incentive programs specifically designed to help first-time buyers like you get into the market faster and with more money in your pocket.
In this comprehensive guide, you'll discover every major first-time buyer incentive available in 2025, including the brand-new GST exemption that can save you up to $50,000 on new construction homes, plus strategies for stacking multiple programs to maximize your savings. Whether you're a young professional in Burnaby, a newcomer to Canada settling in Richmond, or a growing family searching for your first home in the Lower Mainland, this guide will show you exactly how to take advantage of these opportunities.
Table of Contents
Federal First-Time Buyer Programs
The Government of Canada offers several powerful programs that every BC first-time buyer should understand. These programs work together to help you save for a down payment, access your existing savings tax-free, and reduce your overall purchase costs.
First Home Savings Account (FHSA)
The First Home Savings Account is one of the most powerful savings tools available to prospective first-time home buyers. Launched in April 2023, this registered account combines the best features of both RRSPs and TFSAs, giving you tax-deductible contributions going in and tax-free withdrawals coming out.
You can contribute up to $8,000 per year, with a lifetime maximum of $40,000. If you don't contribute the full amount in any given year, you can carry forward up to $8,000 in unused contribution room to the following year. This means if you contributed only $3,000 this year, you could contribute up to $13,000 next year.
Your FHSA can hold various qualified investments including GICs, mutual funds, stocks, and bonds—allowing your down payment savings to grow tax-free while you prepare to buy. When you're ready to purchase, you can withdraw the funds tax-free for a qualifying home purchase.
To qualify, you must be a Canadian resident, at least 18 years old, and have not owned a home you lived in as your principal residence in the current year or the previous four calendar years.
Home Buyers' Plan (HBP)
The Home Buyers' Plan allows you to withdraw up to $60,000 from your RRSP tax-free to put toward a down payment on your first home. This limit was increased from $35,000 in April 2024, making the HBP significantly more powerful for today's home buyers.
If you're purchasing with a spouse or common-law partner who also qualifies, you can each withdraw up to $60,000—giving you access to up to $120,000 for your down payment from your combined RRSPs.
The funds must be repaid to your RRSP within 15 years, with a minimum of 1/15th of the borrowed amount repaid each year. For withdrawals made between January 1, 2022 and December 31, 2025, you have a five-year grace period before repayments begin, giving you more time to get settled in your new home.
To qualify, you must be a first-time home buyer (haven't owned a home you lived in during the previous four years), and the funds must have been in your RRSP for at least 90 days before withdrawal.
First-Time Home Buyers' Tax Credit (HBTC)
The First-Time Home Buyers' Tax Credit provides a non-refundable tax credit of up to $1,500. You claim a $10,000 amount on line 31270 of your income tax return, which at the lowest federal tax rate of 15% results in a $1,500 reduction to your taxes payable.
This credit helps offset closing costs like legal fees, home inspections, and land transfer taxes. You can claim the full amount yourself or split it with your spouse or common-law partner, but your combined total cannot exceed $10,000.
To be eligible, you must be a first-time home buyer (haven't lived in a home owned by you or your spouse in the previous four years), and the qualifying home must be registered in your name and intended as your principal residence within one year of purchase.
NEW: First-Time Home Buyers' GST Rebate (2025)
Effective May 27, 2025, first-time home buyers can now recover up to $50,000 in GST on newly constructed homes. This landmark program eliminates the 5% GST for eligible first-time buyers purchasing new homes valued up to $1 million, with a phased rebate available for homes between $1 million and $1.5 million.
This rebate applies to newly constructed homes, substantially renovated homes, owner-built homes, and co-operative housing shares where GST was paid. To qualify, at least one purchaser must be a first-time home buyer acquiring the home for use as their primary residence and must be the first individual to occupy the home.
The rebate is available for purchase agreements signed on or after May 27, 2025 and before 2031, with construction beginning before 2031 and substantially completed before 2036. This is a one-time benefit that cannot be claimed more than once per individual.
BC Provincial Incentive Programs
British Columbia offers some of the most generous provincial incentive programs in Canada, designed specifically to help residents achieve homeownership in our high-cost housing market.
First-Time Home Buyers' Program (Property Transfer Tax Exemption)
BC's First-Time Home Buyers' Program reduces or eliminates the Property Transfer Tax (PTT) on qualifying purchases. Normally, BC's PTT is calculated at 1% on the first $200,000, 2% on $200,000-$2,000,000, and 3% above $2,000,000—which can add tens of thousands of dollars to your closing costs.
As a qualifying first-time buyer, you receive a full exemption on the first $500,000 of your purchase price. This means if you buy a home for $700,000, you pay no PTT on the first $500,000 and only pay PTT on the remaining $200,000. The maximum savings under this program is approximately $8,000.
To qualify for the full exemption, your home must have a fair market value of $835,000 or less. A partial exemption is available for homes valued between $835,000 and $860,000.
Eligibility requirements include being a Canadian citizen or permanent resident, having lived in BC for at least 12 consecutive months before the purchase (or filed BC income taxes for 2 of the last 6 years), never having owned an interest in a principal residence anywhere, and never having received this exemption before. You must move into the home within 92 days and occupy it as your principal residence for the remainder of your first year of ownership.
Newly Built Home Exemption
The Newly Built Home Exemption provides substantial PTT savings for buyers of new construction, regardless of whether you're a first-time buyer. Effective April 1, 2024, the threshold for this exemption increased dramatically from $750,000 to $1.1 million.
For newly built homes with a fair market value up to $1.1 million, you receive a full PTT exemption, potentially saving you up to approximately $20,000. A partial exemption is available for newly built homes valued between $1.1 million and $1.15 million.
Qualifying properties include newly constructed houses, new apartments in newly built condominium buildings, manufactured homes on vacant land, and houses removed from one property and placed on another (as long as they haven't been occupied since relocation).
To qualify, you must be a Canadian citizen or permanent resident, intend to use the property as your principal residence, and be the first person to occupy the home. You must move in within 92 days of registration and continue to occupy the home as your principal residence for the remainder of your first year.
BC Home Owner Grant
Once you own your home, the BC Home Owner Grant reduces your annual property taxes on your principal residence. While not exclusively for first-time buyers, this ongoing benefit helps make homeownership more affordable year after year.
The basic grant is $570 per year for homes in designated urban areas like Metro Vancouver, Greater Victoria, and the Fraser Valley. For homes in rural or northern areas, the grant is $770 per year. Over a 30-year mortgage, this adds up to between $17,100 and $23,100 in savings.
Seniors, veterans, and persons with disabilities may qualify for an additional grant of up to $1,045 per year. To receive the grant, your home must be your principal residence and have an assessed value below approximately $2.175 million for full eligibility.
New 2025 Mortgage Rules: 30-Year Amortization
Effective December 15, 2024, the federal government introduced landmark changes to mortgage rules that significantly improve affordability for first-time home buyers.
Extended Amortization for First-Time Buyers
All first-time home buyers can now choose a 30-year amortization period on insured mortgages, extending from the previous 25-year maximum. This longer repayment period reduces your monthly mortgage payments, making it easier to qualify for a mortgage and manage your household budget.
For example, on a $500,000 mortgage at 5% interest, extending from 25 to 30 years reduces your monthly payment by approximately $250. While you'll pay more interest over the life of the loan, the reduced monthly burden can make the difference between qualifying for your dream home or not.
This option is available to all first-time home buyers regardless of whether they're purchasing new construction or a resale property.
Increased Insured Mortgage Cap
The price cap for insured mortgages has increased from $1 million to $1.5 million. This is significant for Vancouver-area buyers, where many properties exceed the previous threshold.
With this change, you can now purchase a home up to $1.5 million with less than 20% down payment and still qualify for mortgage insurance. The down payment requirements for these higher-priced homes are 5% on the first $500,000 and 10% on the portion between $500,000 and $1.5 million.
This means a $1.5 million home now requires a minimum down payment of $125,000 (previously requiring $300,000 or 20%), dramatically reducing the barrier to entry for homes in Vancouver's competitive market.
How to Stack Programs for Maximum Savings
The real power of these first-time buyer incentives comes from combining them strategically. Here's how a Vancouver first-time buyer could potentially save over $75,000 on a new construction home.
Scenario: $900,000 New Construction Condo in Burnaby
Consider this example for a couple purchasing their first home together:
Down Payment Sources:
Combined FHSA withdrawals (both partners): $80,000
Combined HBP withdrawals (both partners): $120,000
Total down payment available: $200,000+
Tax Savings and Rebates:
GST Rebate on new construction: $45,000
BC Newly Built Home Exemption: $16,000
First-Time Home Buyers' Tax Credit: $1,500
Total savings: $62,500+
Ongoing Savings:
BC Home Owner Grant: $570/year
30-year amortization: Lower monthly payments by approximately $300/month
Combined first-year savings: Over $75,000
Key Stacking Strategies for Vancouver Buyers
First, open your FHSA as early as possible, even if you can only contribute small amounts initially. Contribution room accumulates from the year you open the account, so starting early maximizes your potential savings.
Second, maximize your RRSP contributions with the HBP in mind. Even if homeownership feels years away, the tax-deferred growth of RRSP contributions provides a ready source of down payment funds through the Home Buyers' Plan.
Third, consider new construction to access both the GST rebate and the Newly Built Home Exemption. These two programs alone can save you over $65,000 on eligible properties.
Fourth, work with a knowledgeable mortgage broker who understands how to structure your financing to take advantage of the 30-year amortization and increased insured mortgage cap while ensuring you qualify for all available programs.
FAQs
What qualifies as a "first-time home buyer" in BC and Canada?
For most federal programs including the FHSA, HBP, and HBTC, you're considered a first-time home buyer if you haven't lived in a home owned by you or your spouse or common-law partner as your principal residence in the current year or the previous four calendar years. However, BC's provincial programs have stricter requirements—you must never have owned an interest in a principal residence anywhere in the world at any time to qualify for the BC First-Time Home Buyers' Program. The newly announced GST rebate also requires you haven't owned a home you lived in during the current or previous four calendar years.
Can I use multiple first-time buyer programs together?
Yes, these programs are designed to work together. You can combine FHSA withdrawals with HBP withdrawals for your down payment, then claim the HBTC on your tax return, apply for the GST rebate if purchasing new construction, and receive the BC PTT exemption at closing. The key is understanding each program's eligibility requirements and timing. A mortgage professional can help you coordinate these benefits to maximize your savings.
I'm a newcomer to Canada. Do I qualify for these programs?
Many programs require Canadian citizenship or permanent residency. The HBP and HBTC require you to be a Canadian resident. The FHSA requires you to be a Canadian resident and at least 18 years old. BC's provincial programs require you to be a Canadian citizen or permanent resident and to have lived in BC for at least 12 consecutive months before purchase, or to have filed BC income taxes for 2 of the last 6 years. If you're working toward permanent residency, start planning now so you're positioned to take advantage of these programs when you become eligible.
Conclusion
First-time home buyers in BC have never had access to more support programs. From the tax-advantaged savings power of the FHSA to the substantial GST rebate on new construction, from BC's generous PTT exemptions to the new 30-year amortization options, these programs can collectively save you tens of thousands of dollars on your first home purchase.
The key to maximizing these benefits is planning ahead and working with professionals who understand how each program works. Whether you're just starting to save or you're ready to start your home search in Vancouver, Burnaby, Richmond, or anywhere in the Lower Mainland, understanding these incentives puts you in a stronger position to achieve your homeownership goals.
Don't leave money on the table. Every dollar saved on closing costs and taxes is a dollar that can go toward building equity in your first home.
Ready to start your journey to homeownership? Get pre-approved in 24-48 hours and discover exactly how much you can afford. Call Bill Karalash at 604-265-5858 or schedule a free consultation to learn which programs you qualify for and how to maximize your savings.
Bill Karalash is a licensed sub-mortgage broker (License #MB610235) operating under Breezeful Brokerage (License #MB601942) in British Columbia. Serving the Greater Vancouver area and all of BC, Bill specializes in helping first-time buyers, self-employed professionals, and newcomers to Canada navigate the mortgage process with personalized solutions and expert guidance.
Sources:
Government of Canada - First Home Savings Account: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html
Government of Canada - Home Buyers' Plan: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
Government of Canada - GST Relief for First-Time Home Buyers: https://www.canada.ca/en/department-finance/news/2025/05/gst-relief-for-first-time-home-buyers-on-new-homes-valued-up-to-15-million.html
Province of British Columbia - First Time Home Buyers' Program: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers
Province of British Columbia - Newly Built Home Exemption: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/newly-built-home-exemption
Government of Canada - 30 Year Amortization Announcement: https://www.canada.ca/en/department-finance/news/2024/09/government-announces-boldest-mortgage-reforms-in-decades-to-unlock-homeownership-for-more-canadians.html
