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The First-Time Home Buyer Savings Account (FHSA) is a savings account that is sponsored by the Canadian government. An FHSA combines some of the features of an RRSP and TFSA. Contributions will generally be tax-deductible, and when a qualifying withdrawal is made, the amount withdrawn is not taxable. It is designed to help first-time home buyers save money for their first home tax-free and reach their homeownership goals faster. The FHSA can be used to purchase a home or for home-buying expenses.
If you are a Canadian resident between the ages of 18 years of age and 71 you could be eligible to open a FSHA. You must be regarded as a first-time home buyer to be eligible and must not have owned a home in the year you opened the FSHA and the previous four years.
Contributions to an FHSA can be deducted from your taxable income, which can save you thousands of dollars in taxes. Unlike other savings accounts, anyone can contribute to an FHSA account and there are no minimum balances required and there are no income levels required.
Contributions that you make to your first home savings accounts (FHSAs) are generally deductible on your income tax and benefit return for the year of the contribution or a future year, similar to registered retirement savings plan (RRSP) contributions. It is important to note that transfers from your RRSPs to your FHSAs are not deductible.
The year in which you open your FHSA, the maximum contribution room is $8,000. Any unused portion is carried forward to the next year to a maximum of $40,000, which must be used for their first down payment, within 15 years.
Any contributions you make to your FHSAs and all transfers from your registered retirement savings plans (RRSPs) to your FHSAs will reduce your remaining lifetime FHSA limit.
Contributions to an FHSA can be deducted from your taxable income, which can save you thousands of dollars in taxes.
The funds in an FHSA must be used for home-buying expenses, such as a down payment or closing costs. If you withdraw the funds for any other reason, you may be subject to penalties.
FHSAs come with restrictions on contributions and withdrawals, so you must be sure that you are going to buy a home before opening an account.
FHSA can be a great way to save money for home-buying expenses and take advantage of tax deductions. However, it is important to consider the restrictions and availability of FHSAs before opening an account. If you are interested in opening an FHSA, be sure to research the options available and compare them to other savings accounts to find the best option for you.
If you are interested in learning more, reach out to a Sunlite Mortgage Professional” or something along those lines. Promote your business in the blog as well….how can Sunlite Mortgage help you set up the FHSA, answer questions about it, or access it for your downpayment?
