Are you a first-time homebuyer feeling daunted by saving for a down payment? The First Home Savings Account (FHSA) might be the solution you’ve been looking for.
This registered account is explicitly designed to help Canadians achieve the dream of homeownership.
What sets the FHSA apart is its unique blend of tax advantages and flexible savings options.
It’s a powerful tool that can accelerate your savings and make that first home purchase more attainable.
In a nutshell, an FHSA is like a supercharged savings account. It’s a registered account where you can save up to $8,000 per year (up to a lifetime limit of $40,000) towards your down payment.
Here are some of the best features:
- Tax Deduction – Your contributions are tax-deductible, which means you’ll get a nice chunk of cash back come tax season.
- Tax-Free Growth – The money you deposit in the FHSA grows tax-free, giving your savings more room to bloom.
- Tax-free withdrawal – As long as you use the money for a downpayment, you won’t pay any taxes when you withdraw it.
Think of an FHSA as a government-sponsored boost to help you save faster and smarter for your first home.
To open an FHSA, you need to tick these boxes:
- You’re 18 or older.
- You’re a Canadian resident.
- A first-time Homebuyer: This means you haven’t owned a home in the current or previous four calendar years, and neither has your spouse or common-law partner.
If you change your mind about buying, you can transfer your FHSA funds to a Registered Retirement Savings Plan (RRSP) or a Registered Retirement Income Fund (RRIF) without penalty. It’s a bonus for your retirement savings if you decide homeownership isn’t for you.
As experienced real estate agents in your area, we hope you have found this information helpful. If we can help you with your real estate needs, please do not hesitate to contact us.