One of the best things to come out of Canada's 2022 federal budget announcement is the creation of the tax-free first home savings account (FHSA).
This program will start up sometime in mid-2023 and its goal is to help future homeowners buy their first home.
In the FHSA, you can save up to $40,000 with a maximum contribution of $8,000/year. Similar to the RRSP, your FHSA savings are tax deductible and the investments held in the account can grow tax free like the TFSA.
Restrictions include: must be able to use up these funds within 15 years of opening the account and any leftover contribution room you might have for the year DOES NOT carry over to the next year!
Who can open an FHSA:
- Individual residents of Canada
- Be at least 18 years of age
- Prospective first-time home buyer, which means you, or your spouse or common-law partner (“spouse”) did not own a qualifying home that you lived in as a principal place of residence at any time in the year the account is opened or the preceding four calendar years
Thinking of buying a home in the future? Then you need to get on this FHSA account in 2023!