In the midst of rising interest rates, inflation, the after effects of the pandemic – you are thinking of purchasing a house for the first time? Look at you go!
Turning on the news especially these days always seems to be saturated with nothing but negativity. Well, we have some good news for prospective first time home owners 🙂
The first time home owners savings account is here! “What… you mean a TFSA?” Not quite..
The first time home owners account is new, specific to a property purchase AND is tax deductible. Sound good so far?
Here we outline an overview of the first time home owners savings account to give you a good grasp on how it can help you:
1 The maximum lifetime contribution is $40,000
2 The maximum contribution per year is $8,000. Contribution can carry forward for unused years.
3 The amount contributed is tax deductible, similar to an RRSP
4 The first time savings account can be used in conjunction with other first time home buyer benefits.
5 The FHSA (first time home savings account) can stay open unused for 15 years or until you turn 71.
6 Any funds not used in an FHSA near the end of 15 years or when you turn 71 can be transferred to an RRSP or RRIF
7 The home purchased must be owner occupied within one year of purchase.
8 At the time of purchase you must be a Canadian resident and a first time home buyer.
Unlike the RRSP, consumers do not need to pay back the funds contributed to the first time home savings account. As a tool, in your planning process to purchase a home it can put you on the right path towards home ownership. These accounts can be opened at most banks and credit unions. If you have any questions about buying a home, please don’t hesitate to reach out to one of the professionals at Mortgages.ca, we are here to help!
For all information surrounding the new First Time Savings Account check out the following Government of Canada resources:
First Home Savings Account (FHSA)
Design of the Tax-Free First Home Savings Account