The First Home Savings Account

The Federal Budget in 2022 proposed to create the Tax-Free First Home Savings Account (FHSA), a newly registered account to help individuals save for their first home. The account became available to Canadians on April 1st, 2023 and will be soon available at Assante in June 2023. Contributions to an FHSA would be tax deductible, and income earned in an FHSA would not be subject to tax. Qualifying withdrawals from an FHSA made to purchase a first home would be non-taxable.

To open an FHSA, an individual must be a resident of Canada and at least 18 years of age. In addition, the individual must not have lived in a home that they owned either:

  • at any time in the year the account is opened, or
  • during the preceding four calendar years.

The lifetime limit on contributions would be $40,000, subject to an annual contribution limit of $8,000. The annual contribution limit would be available starting in 2023. An unused contribution room can carry forward to the following year up to a maximum of $8,000.

Amounts are withdrawn to make a qualifying first home purchase and would not be subject to tax. Amounts withdrawn for other purposes would be taxable. Individuals would be limited to making non-taxable withdrawals concerning a single property in their lifetime. Any savings not used to purchase a qualifying home could be transferred to an RRSP or RRIF (Registered Retirement Income Fund) on a non-taxable transfer basis.

If you or your family believe an FHSA could be right for you, speak with your advisor at the McClelland Financial Group.

Related articles

Newsletter Images Articles

How Lower Interest Rates Affect Canadians

Canadians have been anticipating an interest rate decrease for the past six months. Why is the market so excited about an interest rate decrease? An ...
Read More →
Podcast Cover Podcasts

Episode 264: Top 10 Investment Mistakes

Welcome to another episode of Think Smart with TMFG, your go-to podcast for what’s newsworthy and relevant to everyday Canadians. Join Senior Financial Advisor Rob ...
Read More →
Newsletter Images Articles

Top 5 Tax-saving Tactics Every Gen-Xer Should Know

In this week’s article, we’re exploring five essential tax-saving strategies explicitly tailored for Gen Xers. Born between 1965 and 1980, Gen Xers are in their ...
Read More →

Financial Planning Advice from Canada's Top Financial Advisors

Sign Up To Receive Email Updates On The Financial Industry And Complimentary Workshops.

By providing your e-mail address you provide The McClelland Financial Group of Assante Capital Management Ltd. with your express consent to send you electronic communications. If you choose to discontinue receiving e-mails, you may withdraw consent by contacting tmfg@assante.com.

FREE RESOURCE

Get actionable financial insights from the Top financial planners in Toronto.

Toronto's Top Financial Advisors
Copyright Assante Wealth Management. © 2024

Disclaimer | Assante advisory services are offered through Assante Capital Management Ltd. Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. The services described may not be applicable or available with respect to all clients. Services and products may be provided by an Assante advisor or through affiliated or non-affiliated third parties. Some services and products may not be available through all Assante advisors. Services may change without notice. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

We have a team of advisors each specializing in varying portfolio sizes. Please let us know the approx. amount of your investable assets to help us to direct you to the advisor that is best suited to you.