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The Céliapp, "flashy" or substantial help?

Roxanne and Gilbert are both 23 years old and decide to unite their destiny. In order to facilitate their access to a first property, they each open a Céliapp by consulting their financial security advisor.

Roxanne invests the maximum, $8,000 per year, for 5 years, reaching a maximum of $40,000. This investment is deductible from her taxable income. The maximum she can invest each year does not depend on her income level as it does for the RRSP. After 5 years, she will have invested $40,000. With a 5% rate of return, her investment is now worth about $45,000. She can withdraw this amount and use it as a down payment on her first home without having to pay taxes on the capital or the return. Also, unlike the HBP, she won't have to put the money back into her Céliapp.

Gilbert does the same. 2 x 45 000$ = 90 000$.

Is it a good diet? You decide!

The first house the couple wanted in Montreal sold for $725,000. 20% down payment to avoid CMHC = $145,000. In their case, the parents decided to act as guarantors to avoid the CMHC mortgage insurance.

Let's look at the plan in detail.

The basic rules

  • The maximum annual contribution is $8,000

  • The maximum lifetime contribution is $40,000

  • Unused amounts do not accumulate as in an RRSP or TFSA

  • Annual contributions are tax deductible

  • The annual eligible amount is in no way related to earned income.

  • You can transfer money from your RRSP to your TFSA without any tax impact.

  • Conditions for individuals

  • Canadian resident, 18 years of age or older

  • The individual must not have lived in a property owned by him/her in the four years preceding the opening of the Celiapp.

  • Conditions relating to the use of the Celiapp

  • Withdrawal is tax-free if the following condition is met

  • Must be used to purchase a first home within 15 years of opening the account

  • You do not have to pay back the amounts used as for the HBP

  • The owner of the Céliapp can only make one non-taxable withdrawal during his lifetime

  • After 15 years or at any time, amounts can be withdrawn from the Céliapp, but they will be taxable

  • The HBP and the Céliapp cannot be used to purchase the same property.

As mentioned by Mr. Daniel Laverdière in an article published in the Finance et Investissement newspaper, "Many questions remain unanswered". He also mentioned an interesting statistic: "In Germany, only about 51% of the population adopts the lifestyle of home ownership."


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