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Are you a first-time home buyer? Here are four programs you should know about!

Writer's picture: Nadia BoveNadia Bove

Buying a home can be confusing, and lead to a mishmash of excitement and stress, especially as a first-time home buyer. There's a lot to prepare and save for. Here are a few programs that can help you with your purchase!


The First Home Savings Account (FHSA)

The FHSA gives qualified home buyers an opportunity to save up to $40,000 to use towards the purchase of their new home, and contributions are tax-deductible. You can then take that tax refund and reinvest it into your FHSA (FREE MONEY!). You can contribute up to $8,000 per year, and a maximum lifetime contribution of $40,000. With the FHSA, you can withdraw your savings, tax-free, to use towards your down payment on a new home, and unlike the Home Buyers' Plan (HBP), you don't have to pay these funds back. Your FHSA account must be closed on December 31 of the year in which you turn 71 years of age, or on the 15th anniversary of opening your account. Whichever event occurs first. The FHSA can be combined with the HBP for a maximum of $75,000 to use for your down payment.


First-Time Home Buyers Incentive (FTHBI)

The FTHBI is a shared equity program, in which the government will contribute 5 or 10% of the home’s purchase price to use towards your down payment, though you must also must meet the minimum down payment requirements with traditional funds. Repayment of the government’s contribution (capped at 8% per annum) isn’t due until you sell the home, or after 25 years, whichever comes first. A combined income of $120,000, or $150,000 for properties in Toronto, Vancouver, or Victoria Census Metropolitan Areas.

 

First-time home buyers’ program

The BC first-time home buyers' program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you are a first-time home buyer and purchasing a home with another person that doesn't qualify for the program, only the percentage of interest that you, as a qualifying first-time home buyer, have in the property is eligible.


Home Buyers’ Plan (HBP)


The HPB allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. With this program, you can withdrawal up to $35,000 tax free but only if you pay these funds back within 15 years (at least 1/15 th of the withdrawn funds is due yearly) unlike the FHSA which you don't have to pay back. The HBP can be combined with the FHSA, giving you (as an individual) a maximum of $75,000 for your down payment.


Always be sure to contact a professional mortgage broker and realtor to help guide you through the home buying process.


As always, if you have any questions, please don't hesitate to reach out. Always happy to help!


Nadia



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© 2024 by Nadia Bove

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