FIRST TIME HOME BUYERS PLAN (HBP)

 The First-Time Home Buyers Plan (HBP) in Ontario allows eligible individuals to withdraw up to $35,000 from their RRSPs tax-free to purchase their first home. This program helps make homeownership more accessible by reducing the need for a large upfront down payment. Withdrawn funds must be repaid to the RRSP over a 15-year period, starting the second year after the withdrawal. It offers first-time buyers the chance to use their own savings while still benefiting from RRSP tax advantages. The HBP can be used by each buyer in a couple, effectively doubling the available funds. Overall, it’s a helpful tool for easing the financial burden of entering the housing market. 

 A First Home Savings Account (FHSA) is a Registered Savings Plan designed to help Canadians save for their first home. It combines the benefits of a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP), providing unique tax advantages to make homeownership more attainable. 

Key Features of the FHSA are:

Tax-Free Contributions
Contributions to an FHSA are tax-deductible, meaning they can reduce your taxable income, similar to an RRSP.

Tax-Free Growth
Investment earnings, including interest, dividends, and capital gains,    

grow tax-free within the account.

Tax-Free Withdrawals
Funds can be withdrawn tax-free if used for a qualifying first home purchase.

Eligibility:

You must be a Canadian resident aged 18 or older.

You cannot have owned a home in the four years prior to opening the account.

Contribution:

The annual contribution limit is $8,000, with a lifetime maximum of $40,000.

Unused contribution room can carry forward to future years, up to a maximum of $8,000 per year.

Using Your FHSA Funds:

You can withdraw funds tax-free to buy or build a qualifying home.

If unused, funds can be transferred to your RRSP or RRIF tax-free, without affecting your RRSP contribution room.

Why Open an FHSA?

The FHSA is a powerful tool to save for your first home while benefiting from significant tax savings. Whether you’re just starting your savings journey or looking for an efficient way to invest, the FHSA can help you achieve your homeownership goals faster.

Contact us today to learn how a FHSA can fit into your financial plan!