To qualify for this program, you must be a first-time homebuyer, defined as anyone who has not purchased a house or lived in a home their spouse owned in the last four years. (There are also different requirements for people with disabilities.) The HBP funding is treated as a 15-year interest-free loan if you start making annual repayments to your RRSP account no more than two years after borrowing the money from your RRSP. Remember that the money in your RRSP must have been available for at least 90 days before the HBP application is submitted. When repaying your HBP withdrawals, you do not have to repay the money into the same RRSP account — you can contribute to any RRSP account. Instead, the repayment happens when you designate a portion of your RRSP contribution as part of your HBP loan repayment on your taxes.
Tax-Free First Home Savings Account
The Tax-Free First Home Savings Account (FHSA), introduced in 2023, allows you to save up to $40,000 tax-free towards the cost of your first home. This account can hold the same investments currently allowed in your TFSA, including mutual funds, publicly traded securities, bonds, and Guaranteed Investment Certificates (GICs). In addition, similar to an RRSP, any contributions made to your FHSA are tax-deductible. To be eligible to open a FHSA, you must be a resident of Canada, aged 71 or younger. You must also be a first-time home buyer, meaning you or your spouse or common-law partner don’t currently own a home and haven’t in the previous four calendar years. You can contribute $8,000 annually, up to a lifetime limit of $40,000. However, if you cannot contribute the total $8,000 in
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