The First Home Savings Account is a new product geared toward first-time home buyers. It’s almost as if an RRSP and a TFSA had a baby. Here are a few details:
– $8,000 contribution room per year, a total of $40,000. You can start contributing at age 18, but you must contribute something within the calendar year in order to have the remaining amount rollover. Example: If you contribute $100 in 2023, you will have $7,900 rollover to 2024, plus $8,000 for 2024. Allowing you to contribute a total of $15,900 in 2024.
– Contributions are tax deductible and funds are tax-free when used (this is where the TFSA and RRSP baby comes in) The growth and gains are also tax-free!
– Withdrawals from FHSA for any reason other than a home purchase will be taxable and the contribution room is lost permanently.
– You can transfer between FHSA and RRSP but rules do apply
– The FHSA can only be used for one property in your lifetime.
– Once you start contributing, you have 15 years to use the funds towards your first home.
Do you have questions on FHSA? Do you think this will be helpful for people looking to get into the housing market?
More information here