Recently, Patrick Dumond, mortgage broker at Multi-Prêts, appeared on Radio 104.7 Outaouais and discussed two government measures that can make a real difference for first-time homebuyers: the FHSA and the new GST rebate on the purchase of a new home.
Saving tax-free with the FHSA
The First Home Savings Account (FHSA) is a powerful yet still relatively unknown tool. It allows annual contributions while benefiting from a tax deduction, a significant advantage for those looking to build a down payment.
Unlike the Home Buyers’ Plan (HBP), no repayment is required after withdrawal, and eligible withdrawals are completely tax-free. It is even possible to open an FHSA shortly before taking possession of a property, deposit up to $8,000, and withdraw it right away to benefit from the tax refund the following year. This can be an effective strategy to help offset costs such as land transfer taxes or other upfront expenses.
GST rebate on the purchase of a new home
Another tool to watch is the new GST rebate introduced by the federal government. This measure allows eligible first-time buyers of a qualifying new home to claim a rebate of up to $50,000.
The rebate is fully available for newly built homes priced under $1 million, partially available for homes between $1 million and $1.5 million, and unavailable above that threshold. Valid for a five-year period, this program aims to improve access to homeownership in a market where prices have increased significantly over the decades.
Levers to integrate into a home-buying strategy
The FHSA and the GST rebate are important incentives to integrate into your planning. Other programs not to overlook may also be added, such as the First-Time Home Buyers’ Tax Credit, the 30-year amortization option for first-time buyers, or SCHL insurance premium rebates for energy-efficient homes, which can reach up to 25% of the premium.
Putting all the odds in your favour
Buying your first home is also about building an effective financial strategy, understanding the available incentives, and using them at the right time. A Multi-Prêts mortgage broker can guide you through every step to help you make the most of programs such as the FHSA and the GST rebate.