Ontario First Time Home Buyer Down Payment Stacking: FHSA and HBP Strategies
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Dallas Martin
First Time Buyers: The Tax Free Down Payment Formula
Buying your first home in London Ontario, St Thomas, or Woodstock requires strategic capital accumulation. By combining and stacking registered tax shelters, you can build your down payment tax free faster than ever.
How the FHSA and HBP Work Together
Combining the First Home Savings Account (FHSA) and RRSP Home Buyers Plan (HBP) can assemble a pre tax down payment pool of up to $100,000 for individuals or $200,000 for couples:
- First Home Savings Account (FHSA): Contribute up to $8,000 per year to a lifetime maximum limit of $40,000 per person. Contributions reduce your taxable income, and qualified home purchase withdrawals are completely tax free.
- RRSP Home Buyers Plan (HBP): Withdraw up to $60,000 tax free from your RRSP. Repayments are interest free over a 15 year period. Plus, under the federal Bill C 30 updates, HBP withdrawals made between 2022 and 2028 now qualify for an extended 5 year repayment grace period (up from 2 years).
Tax Refund Stacking Tip: If a couple contributes $80,000 to their FHSAs and $120,000 to their RRSPs, they can generate up to $70,000 in tax refunds. Reinvesting this refund directly into your purchase pool shaves years off your home buying timeline.
Build Your Down Payment Stacking Plan Today
Do not navigate tax rules alone. Speak with Dallas Martin today to perform a down payment stacking audit and get pre approved for your home purchase.
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