Yes, it is possible to combine the HBP (Home Buyers' Plan) and the FHSA (First Home Savings Account). You can use funds from both programs to finance the purchase of your first home. However, each program has its own conditions, contribution limits, and repayment terms. For example, the HBP allows you to withdraw up to $35,000 from your RRSP, while the FHSA lets you contribute up to $40,000 with no tax on withdrawals used for a home purchase.
Discover the Home Financing Assistance Programs
Buying a home is an important step and can sometimes seem complex. Fortunately, several financial assistance programs are available to ease the process. Whether you're a first-time buyer or looking to optimize your financing, discover the solutions available to help you access homeownership more easily.
The Home Buyers' Plan (HBP)
The HBP allows buyers to withdraw funds from their RRSP (Registered Retirement Savings Plan) to finance the purchase or construction of a residential property, without paying tax on the withdrawal.
Advantages
- Ability to withdraw up to $35,000 (or $70,000 for a couple).
- Tax-free withdrawal with a 15-year repayment period.
Eligibility
Be a first-time homebuyer or have not owned a property in the past five years.
The 40 km Program
This program allows certain buyers to benefit from a tax advantage if they move more than 40 km from their workplace to purchase their principal residence.
Advantages
- Reduction of moving costs if the distance is more than 40 km.
- Tax relief based on the new proximity to the workplace.
Eligibility
The buyer must move more than 40 km for professional reasons.
The Tax-Free First Home Savings Account (FHSA)
The FHSA is a recently introduced program that allows first-time buyers to save up to $40,000 for a home purchase, combining the benefits of an RRSP and a TFSA.
Advantages
- Contributions are deductible from taxable income.
- No tax on withdrawals if used for a home purchase.
Eligibility
- Be a first-time homebuyer.
- Annual contribution limit of $8,000 with a maximum of $40,000.
The Homeownership Assistance Program (MAPA)
The MAPA is a government program designed to facilitate homeownership for low-income buyers. It offers a grant that can cover part of the down payment needed to purchase a first property.
Advantages
- Non-repayable grant covering up to 10% of the property purchase price.
- No repayment required, as long as the beneficiary retains ownership for a specified period.
Eligibility
- Must be a low-income homebuyer.
- The property value must not exceed a certain limit, which varies by region.
- The application must be submitted before the signing of the purchase agreement.
Do you have questions about these programs ?
FAQ
Frequently Asked Questions about Home Financing Assistance Programs
If you do not repay the amount withdrawn under the HBP within the 15-year period, the unpaid amount will be added to your taxable income for the year the repayment was due. This means you will have to pay tax on the unpaid portion, as it will be considered taxable income. Each year, 1/15 of the total amount must be repaid to your RRSP, and if you don’t repay it, that portion will be added to your tax return as income.
The 40 km Program provides tax benefits for buyers of residential properties who move more than 40 km from their workplace. Under this program, you can deduct certain moving expenses, such as transportation costs for your belongings, temporary accommodation expenses, and other eligible costs. These deductions reduce your taxable income, which can result in a lower amount of tax payable.
Équipe Philippe Poudrier
Residential Real Estate Brokers
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Les Chutes-de-la-Chaudière-Est (Charny), Québec, G6X 1L5
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