Owning the home you live in does not make its mortgage interest or property tax deductible. Instead, the Government of Canada and Ontario offer targeted tax incentives, meant to make home ownership more affordable, for buying, saving for, adapting or sharing that home. For each one, this guide gives who qualifies, the amount and its tax year, where to claim it and the proof to keep.
Key Takeaways
- The federal credits kept their dollar caps, but the rate behind them fell to 14.5% for 2025 and 14% for 2026, so each is worth less than older articles say.
- The multigenerational credit is refundable, and it can sit alongside the accessibility credit on separate invoices.
- Ontario’s land transfer tax refund requires no past home ownership anywhere, a stricter test than the federal four-year look-back.
- In Toronto, the provincial and city refunds together reach $8,475, about six times the federal purchase credit for 2026.
How Homeowner Credits Reduce Your Tax
A non-refundable tax credit lowers the federal tax you owe but cannot create a refund. The Income Tax Act (ITA) calculates the three federal credits in this guide as a dollar amount times the lowest federal rate, which fell from 15% to 14% on July 1, 2025. That makes the rate 14.5% for 2025 and 14% for 2026.
The caps did not move, so the credit amount did. The Canada Revenue Agency (CRA) valued the $10,000 purchase claim at up to $1,500 in January 2025, and by our arithmetic it is worth $1,450 for 2025 and $1,400 for 2026. Ontario’s credit forms for the 2025 tax year, ON428 and ON479, carry no provincial version of any of the three. Every figure below comes from canada.ca, ontario.ca or toronto.ca as of September 2026.
| Program | Who qualifies | Amount and year | Where you claim | Proof to keep |
|---|---|---|---|---|
| Purchase credit (federal) | Owned no home you lived in, this year or the four before | $10,000, worth $1,450 for 2025 and $1,400 for 2026* | Line 31270 | Purchase agreement, statement of adjustments |
| FHSA | Adult resident, 71 or younger, same four-year test | $8,000 a year, $40,000 lifetime | Schedule 15, line 20805; Form RC725 | Schedule 15, RC725, agreement |
| HBP | Resident, same four-year test | Up to $60,000, repaid within 15 years | Form T1036; Schedule 7, line 24600 | T1036, notice of assessment |
| Accessibility credit (federal) | 65 or older, DTC-eligible, or certain relatives | Up to $20,000 a year, worth up to $2,900 for 2025* | Line 31285 | Itemized invoices, proof of payment |
| Multigenerational credit (federal, refundable) | Household adding a unit for a senior or an adult with a disability | Up to $50,000, worth up to $7,250 for 2025 | Schedule 12, line 45355 | Invoices with GST/HST numbers |
| Ontario land transfer tax refund | No past home ownership anywhere; citizen or permanent resident | Up to $4,000 | At registration, or within 18 months | Agreement, statement of adjustments, proof you moved in |
| Toronto land transfer tax rebate | Same test, home in Toronto | Up to $4,475 | At registration, or within 18 months | Same as Ontario |
| Ontario seniors’ property tax grant | 64 or older, owner-occupier, income limits | Up to $500 a year | Form ON-BEN, line 61120 | Property tax bills |
*Our arithmetic, at the lowest federal rate for that year.
The First-Time Home Buyers’ Tax Credit: Eligibility and Line 31270
The CRA calls this credit the home buyers’ amount. You qualify if you or your spouse or common-law partner acquired a qualifying home in the year, you did not live in another home either of you owned in that year or the four before, and you intend to live in it as your primary home within one year. You can skip the ownership test if you are eligible for the disability tax credit (DTC), or if you buy the home for a related person who is.
Most types of home count, from a house or condominium unit to a mobile home or a co-op share with an equity interest. Section 118.05 of the ITA multiplies $10,000 by the lowest federal rate, so by our arithmetic the credit is $1,450 for a 2025 purchase and $1,400 for 2026. Enter the amount on line 31270 of your personal income tax return for the year you acquire the home. If you and your spouse both qualify, you can split it up to a combined $10,000.
Send no documents with your return, but keep them in case they are requested. The agency does not say which ones, so in our practice we file the agreement of purchase and sale and the lawyer’s statement of adjustments.
The First Home Savings Account and the Home Buyers’ Plan
Two registered plans help if you are buying your first home, and you can use both for the same home if you meet each plan’s conditions at the time of each withdrawal.
FHSA. You can open one if you are an adult resident of Canada, 71 or younger at the end of the year you open it, and did not live in a home that you or your current spouse or common-law partner owned in that year or the previous four calendar years. Your FHSA participation room is $8,000 a year to a lifetime $40,000, starting only once an account exists, and up to $8,000 of unused room carries forward. Going over costs 1% a month on the highest excess, the same monthly rate as the RRSP over-contribution penalty.
Contributions are deductible on line 20805, calculated on Schedule 15, which you file for the year you open your first FHSA even if you contribute nothing. A qualifying withdrawal is tax-free: you need a written agreement to buy or build a qualifying home before October 1 of the following year, and you give Form RC725 to your financial institution.
HBP. The plan lets you withdraw up to $60,000 from your RRSPs on Form T1036. You must be a resident of Canada, pass the same four-year test, have a written agreement to buy or build the home, and intend to live in it within one year. The home must be bought or built before October 1 of the year after your first withdrawal, and RRSP contributions made in the 89 days before a withdrawal may not be deductible.
You repay over up to 15 years, with a yearly minimum of your balance divided by the years left. For a first withdrawal made from 2022 to 2025, repayments start in the fifth year after it; before 2022, they started in the second year. Designate each repayment on Schedule 7 and line 24600. Repayments are not deductible, any shortfall is added to your income on line 12900, and your notice of assessment shows the balance.
The Home Accessibility Tax Credit for Seniors and People With Disabilities
This credit covers renovations that make your home more accessible for a qualifying individual: work that helps them get in, move and function inside, or face less risk of harm. That person is 65 or older at the end of the year, or eligible for the DTC. Section 118.041 of the ITA allows up to $20,000 of eligible expenses a year, the limit since 2022, which by our arithmetic is worth up to $2,900 for 2025 and $2,800 for 2026.
The qualifying individual can claim it, as can a spouse or common-law partner, certain supporting relatives, or anyone entitled to claim their disability amount, all sharing one $20,000 limit. It has to be a housing unit located in Canada that one of you owns and that the qualifying individual ordinarily lives in.
Building materials, fixtures, equipment rentals, plans, permits and professional work count, while your own labour, routine repairs, household appliances and financing costs do not. Complete the chart on your Federal Worksheet, enter the result on line 31285, and keep invoices showing the vendor, the work, the date and proof of payment. An expense that also qualifies as a medical expense can be claimed as both, the agency confirms, but that generosity stops at the next credit.
The Multigenerational Home Renovation Tax Credit for a Secondary Unit
This refundable credit is paid even if you owe no tax. It applies when a renovation creates a self-contained secondary unit, with a private entrance, kitchen, bathroom and sleeping area, so a senior or an adult with a disability can live with a relative. The qualifying individual is 65 or older by the end of the year the renovation ends, or 18 to 64 and eligible for the DTC. The relative is an adult parent, grandparent, child, grandchild, sibling, aunt, uncle, niece or nephew, and both must live in the home within 12 months of completion.
Under section 122.92 of the ITA, you can claim up to $50,000 of costs per renovation, and only one renovation per qualifying individual, ever. For 2025, the credit is 14.5% of those costs, to a maximum of $7,250. The $7,500 still quoted online was the 15% maximum, as the CRA described it in January 2025, and by our arithmetic the 2026 maximum is $7,000.
You can claim the credit if you are a resident of Canada living there, or moving in within 12 months, as the senior, their spouse or the relative, or if you are the relative and own the home. File Schedule 12 and line 45355 for the year the renovation period ends, and split the claim if more than one of you is eligible. Keep invoices with each contractor’s name, business address and GST/HST registration number. Work by a non-arm’s length relative counts only if they are registered for GST/HST, and costs already claimed for the medical expense or accessibility credit are excluded.
Example: splitting invoices between the two credits. Robert, 68, owns his house and in 2025 finishes a $62,000 basement unit for himself and his wife, while his daughter’s family moves upstairs. Of that, $12,000 is a ramp, grab bars and a walk-in shower. Put all $62,000 toward the multigenerational credit and the $50,000 cap leaves him $7,250. Claim the $12,000 on line 31285 instead, and the other $50,000 still earns $7,250 while the accessibility claim adds $1,740, if his tax owing is at least that much. By our arithmetic, sorting the invoices is worth $1,740 for 2025, or $1,680 at the 2026 rate.
When a family has just finished a suite like Robert’s, the first document we ask for is an itemized contractor invoice, because one lump-sum bill makes that split hard to support if the claim is reviewed.
GST/HST Rebates on a New Home Purchase
If you buy a new home from a builder, build one, or substantially renovate your home, you may recover part of the goods and services tax or harmonized sales tax paid. The federal new housing rebate applies to a new or substantially renovated house valued under $450,000, and Ontario’s new housing rebate goes up to $24,000. The first-time home buyers’ GST/HST rebate, which has received Royal Assent, can refund all of the GST or the federal part of the HST on a new home valued up to $1 million that you will use as your primary place of residence, reducing between $1 million and $1.5 million.
For agreements from April 1, 2026 to March 31, 2027, Ontario’s enhanced new housing rebate can lift total relief on the 8% provincial part to $80,000, on a home valued below $1,850,000. Ontario announced it in its March 2026 budget, and the CRA explains how to claim it in Notice 346. Landlords use a separate new residential rental property rebate. Our guide to the GST/HST new housing rebate in Ontario explains how to apply.
Land Transfer Tax Refunds for First-Time Homebuyers in Ontario and Toronto
You pay land transfer tax when you buy a home and the purchase is registered, and Ontario refunds up to $4,000 of it to buyers who qualify. The eligibility test is stricter than the federal one: you must be 18 or older, a Canadian citizen or permanent resident, and never have owned an eligible home, or an interest in one, anywhere in the world. Your spouse cannot have owned one while they were your spouse, and you must move in within nine months.
Toronto adds a municipal land transfer tax, with a rebate of up to $4,475 on the same conditions. Claim both when the transfer is registered electronically, or apply within 18 months to Ontario’s Ministry of Finance and to the City. Keep the agreement of purchase and sale, the statement of adjustments, proof you moved in and proof of citizenship or permanent residence, which Ontario asks for.
Example: a $780,000 first purchase in Toronto in 2026. Amira buys a townhouse for $780,000. Ontario charges 0.5% up to $55,000, 1% to $250,000, 1.5% to $400,000 and 2% to $2 million on a single-family residence, and Toronto’s rates match up to $2 million. By our arithmetic, each tax is $12,075, and the two refunds cut the $24,150 total by $8,475 to $15,675. Her line 31270 claim is worth $1,400 for 2026, so the closing refunds are worth about six times as much. Had she owned a condo abroad eight years earlier, she would still pass the federal four-year test but lose both refunds.
Provincial Tax Relief for Ontario Property Owners and Seniors
Property tax on your own home is not deductible beyond a qualifying work space, but Ontario returns some of it through Form ON-BEN, filed with your return.
Ontario energy and property tax credit. Part of the Ontario Trillium Benefit, it helps low- to moderate-income residents with property tax and the tax on energy. You apply for the 2026 credit on your 2025 return, for a maximum of $1,307 for non-seniors and $1,488 for seniors, and you keep your property tax bills rather than sending them.
Ontario senior homeowners’ property tax grant. If, as of December 31 of the previous year, you were 64 or older, lived in Ontario, and owned and occupied your principal residence, you can get up to $500 a year back on property tax. The full grant goes to singles with adjusted family net income up to $35,000 and couples up to $45,000, reduced by 3.33% of income above that. Report property tax on line 61120. The grant may reduce the property tax part of the credit above.
Ontario’s seniors’ home safety credit is no longer offered: its ontario.ca page is archived, and it is not on Ontario’s 2025 credits form.
If You Work From Home or Sell Your Home
If you use your home for work, part of its costs may be deductible. A salaried employee cannot claim property taxes, home insurance or mortgage interest for a home office, and a commission employee can claim the first two but not the interest. A self-employed person with a qualifying work space can deduct a share of mortgage interest, property taxes, heating, insurance and electricity on Form T2125, up to the business’s income before those costs. Our guide to home office expenses covers the calculation.
When you sell, the principal residence exemption can remove the tax on the capital gain, but only if you report the sale and designate the property on Schedule 3. The CRA accepts a late designation in certain circumstances, and a penalty may apply. The gain on a home owned for less than 365 consecutive days is generally business income under the flipping rule, with exceptions for certain life events. Income Tax Folio S1-F3-C2 sets out the exemption, and our overview of capital gains tax in Canada puts it in context.
All of these credits are for a home you live in. Rental properties follow their own rules, and a home held in a company raises separate questions, covered in our post on buying property under a corporation.
Common Mistakes With These Credits
- Budgeting with the $1,500, $3,000 or $7,500 figures from older articles.
- Assuming the Ontario and Toronto refunds apply because you pass the federal four-year test.
- Accepting one lump-sum invoice for a suite that includes accessibility work.
- Paying a relative who is not registered for GST/HST for work on a secondary unit.
- Missing a minimum HBP repayment, which adds the shortfall to your income.
- Skipping Schedule 15 in the year you open an FHSA.
- Selling without designating the home on Schedule 3.
Your Action Checklist Before Tax Season
- Open an FHSA as soon as you qualify, since room starts only once an account exists.
- Sign the written purchase agreement before any FHSA or HBP withdrawal.
- Confirm with your lawyer that any land transfer refund you qualify for is claimed at registration.
- Claim line 31270 for the year you acquire the home, and split it with your spouse if you both qualify.
- Ask contractors for itemized invoices that show a GST/HST registration number.
- Check your HBP balance on each notice of assessment and designate repayments on Schedule 7.
- File your tax return every year with Form ON-BEN if you are an Ontario senior who owns a home.
Frequently Asked Questions
What are the tax benefits of owning a home in Canada?
The main tax breaks are the line 31270 purchase credit, the FHSA and the HBP for a down payment, two renovation credits, and the principal residence exemption when you sell. Ontario adds land transfer tax refunds and property tax relief for lower-income households. Mortgage interest and property tax on your own home are not deductible unless part of it is a qualifying work space.
Can I claim property taxes on my tax return in Canada?
Not for the home you live in, unless you are self-employed with a qualifying work space there or a commission employee with a home office. In Ontario, property tax you paid supports part of the Ontario Trillium Benefit and, for seniors, a grant of up to $500 a year, both applied for on Form ON-BEN.
What is the $7,500 credit for a family suite?
It is the multigenerational credit for a secondary unit that lets a senior or an adult with a disability live with a relative, and it paid 15% on up to $50,000 of costs. For 2025, the maximum is $7,250 at 14.5%, and by our arithmetic it is $7,000 for 2026.
Can I deduct mortgage interest or home insurance in Canada?
Not for the home you live in unless you use part of it to earn income. A self-employed person can deduct a share of both for a qualifying work space, and a commission employee can claim home insurance but not mortgage interest. A salaried employee can claim neither.
Do I still qualify if I owned a home years ago?
For the federal programs, yes, if you have not lived in a home you or your spouse owned in the year you buy or withdraw, or in the four calendar years before. Ontario’s and Toronto’s land transfer refunds are stricter, since any past ownership anywhere in the world disqualifies you.
Can I use the FHSA and the HBP for the same home?
Yes, as long as you meet each plan’s conditions at the time of each withdrawal. The FHSA withdrawal is tax-free, while the HBP amount has to be repaid to your RRSPs over up to 15 years.
Can two people claim the home buyers’ amount?
Yes. If you and your spouse or common-law partner both qualify, you can split the claim, but the total cannot exceed $10,000. By our arithmetic, that is $1,400 of federal credit for 2026 however you divide it.
The Bottom Line
The tax savings from each claim are modest on their own and larger together.
- The purchase, accessibility and multigenerational credits are worth 14.5% of the claim for 2025 and 14% for 2026.
- Ontario’s and Toronto’s refunds use a never-owned test, stricter than the federal four years.
- Every claim rests on documents you keep, not documents you send.
Which of these you can use depends on when you bought, who lives with you and how the invoices were written. Our personal tax team prepares returns with these claims, and a tax planning review before an FHSA or HBP withdrawal settles the timing. Contact us before you file.
