First Home Savings Account (FHSA)
PR Wealth Management Inc.
Financial Planning Services for Individuals and Businesses
Planning to buy your first home?
Take a minute to read the following....
In 2022, the Government of Canada announced a new First Home Savings Account (FHSA).
The Tax-Free First Home Savings Account (FHSA) is a registered investment account that allows Canadian residents to contribute up to $40,000 (with an annual contribution limit of $8,000) to buy their first home in Canada.
You can hold various investments within an FHSA – including mutual funds and segregated funds. And any investment growth and withdrawals from a FHSA will be tax-free. This is provided you use your withdrawals to buy a qualifying home.
Plus, any contributions you make to an FHSA will be tax-deductible. This means you can claim a deduction and lower your taxable income, which may reduce the amount of tax you’ll have to pay overall.
Who can open an FHSA?
? Must be a Canadian resident
? Minimum of 18 years of age
? Annual contribution limit of $8,000 with a lifetime limit of $40,000
? Contributions are tax deductible (like an RRSP)
? Qualifying withdrawals are tax-free (like a TFSA)
? Must be a first-time home buyer (has not owned a home in which they lived during the current or preceding four calendar years)
? Unused FHSA proceeds can be transferred on a tax-deferred basis to an RRSP or RRIF