Two Types of First-Time Homebuyer

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There's more than one definition of a First-Time Homebuyer (FTHB).

It depends on the context.

In Ontario, we use the FTHB designation for 2 key programs:

1. Land Transfer Tax (LTT) Rebate
2. First Home Savings Account (FHSA)

The problem?

They use different criteria.

So some clients see that they qualify under the FHSA definition and assume it applies to the LTT rebate too.

But it doesn’t.

And as real estate professionals, you need to understand the difference.

Land Transfer Tax Rebate

If you're a First-Time Homebuyer you get a Rebate on Land Transfer tax.

For both the Ontario Land Transfer Tax (LTT) and the Toronto Municipal Land Transfer Tax (MLTT), the criteria is:

• At least 18 years old
• Canadian Citizen or Permanent Resident
• Never owned a home anywhere in the world
• If married or common-law, spouse must have never owned a home while they were your spouse
• Must move into the home as principal residence within 9 months

“Ownership” includes partial ownership or inherited property — even a 1% interest disqualifies you.

It’s strict.

And most importantly, there’s no way to “requalify.”

Once you’ve owned, you’re no longer a First-Time Homebuyer under this program.

First Home Savings Account (FHSA)

The First Home Savings Account is a federal program that combines the tax benefits of an RRSP and a TFSA to help first-time buyers save for a home.

I’m seeing more clients using it.

Contributions are tax-deductible, and withdrawals for a qualifying purchase are tax-free.

But the definition of “First-Time Homebuyer” under this program is different.

To qualify, a buyer must:

• Not have lived in a home they (or their spouse/common-law partner) owned at any time in the current calendar year or the previous 4 calendar years.

It’s not about whether they’ve ever owned a home — it’s about whether they’ve lived in one they owned recently.

That means:

• Someone who owned a rental property but never lived in it can still open and use an FHSA.
• A buyer who sold their home more than four years ago will also qualify again.

Why This Matters

A client might qualify as a First-Time Homebuyer under the FHSA definition, but still be ineligible for the LTT rebate.

If you’re helping a buyer plan their closing costs, this matters.

Otherwise, your client could be expecting thousands back on closing that they’ll never receive. And this does happen.

Understanding which definition applies, and when, lets you set expectations early and position yourself as the real estate professional who actually understands the closing process.