Dreaming of buying your first home?
Here's your first step...
It can be tough to juggle rent and other expenses while trying to put money aside for a down payment. But don't worry. We've got your back!
The key to unlocking your dreams of home ownership is the tax-free First Home Savings Account (FHSA), and here's why it's awesome:
- You get tax deductions on the money you put in
- Any growth your account sees? Also tax-free!
- And when you're ready to withdraw for your first home purchase? You guessed it, tax-free!
- What is a First Home Savings Account (FHSA)?
- Who is eligible for an FHSA?
- How does an FHSA work?
- FHSA vs Home Buyers' Plan
What is a First Home Savings Account (FHSA)?
Who is eligible for an FHSA?
- A Canadian resident
- 18 years or older
- A first-time home buyer
How does an FHSA work?
- Tax Deductible Contributions - up to $8,000 annually, lifetime limit of $40,000. Your annual FHSA contributions can be claimed as an income tax deduction for contributions made in that year.
- A maximum of $8,000 unused contribution room can carry forward to the following year
- The account can stay open for a maximum 15 years or until the end of the year you turn 71
- Tax Sheltered Savings - Investment income and growth within the account are not taxable
- Tax-Free Withdrawals - Qualifying withdrawals for a first home purchase are tax-free
FHSA vs Home Buyers' Plan
In an FHSA, you are not required to pay back the funds withdrawn toward the purchase of a qualifying home.
As a first-time homebuyer, you can use both FHSA withdrawals and HBP withdrawals toward a qualifying home purchase.
Both you and your partner can each have an FHSA to contribute to your downpayment - as long as you are both first-time home buyers. If you are also using the HBP, good news! You can use both HBP and your FHSA for the same home and so can your partner!
So, why wait? We’re here to support you every step of the way on your journey towards home ownership.
Take the first step towards your first home with an FHSA—talk to a Wealth Specialist today!
Credential Financial Strategies Inc. & Credential Securities