Earlier this year the First Home Savings Account (FHSA) was introduced by the Government of Canada. It was designed to help Canadians save for their first home tax-free (with limits, of course). With tax advantages, contribution flexibility, and the freedom of tax-free withdrawals, this plan goes a long way to helping first-time home buyers.
Once you get there, remember, I offer mortgage solutions that open doors!
Saving for Your First Home with the First Home Savings Account (FHSA)
1. Eligibility
- You must be a first-time home buyer
- A resident of Canada
- At least 18 years of age (legally able to contract with others)
- Not more than 71 on December 31 of the year
2. Contributions (come with a bonus in the form of deductions on your income tax return)
- You can contribute up to $8,000 per year
- The lifetime maximum contribution is $40,000
- If you don’t utilize your full $8,000 contribution in a given year, you can carry forward the unused amount to future years
- You can transfer funds from an existing Registered Retirement Savings Plan (RRSP) to an FHSP. Note, you won’t receive an additional tax deduction for this transfer
3. Deductions
- The contribution deadline is December 31 of each year. This is unlike the RRSP deadline of 60 days after year end.
- If you contribute to your FHSA but don’t need to claim the deduction in the current tax year, you can carry it forward to future years.
4. Income and Gains
- All income in your FHSA account grows tax-free. This means that your savings can grow without the burden of taxation.
5. Withdrawals
- One of the highlights of the FHSA is that qualifying withdrawals for buying a home are tax-free. This is different from other Home Buyers Plans, where you can borrow up to $35,000 from your RRSP but need to pay it back over 15 years. Your FHSA withdrawals for purchasing your first home come with no repayment obligations.
Learn more about the First Home Savings Account from the Government of Canada: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html
Running For Rachael Was a Runaway Run!
We couldn’t have done it without you! This year’s Running For Rachael event on September 24 attracted 310 people, including 85 high school students and 50+ volunteers!
We raised an amazing $40,862.44 despite these challenging economic times, and we proudly stand shoulder to shoulder with the community in proving suicide prevention is everyone’s responsibility. Sincere thanks from my husband, Sid and I for your phenomenal support! Follow this link to see more event photos.