New opportunities to buy your first home in Canada with the First Home Savings Account (FHSA)!
At Moneylatam, we are excited to share with you some excellent news for those who are looking to buy their first home in Canada: the recent launch of the First Home Savings Account (FHSA).
Starting January 1, 2023, eligible Canadian residents can open an FHSA and make tax-free contributions of up to $8,000 per year, with a lifetime limit of $40,000. The funds accumulated in the FHSA can be used to cover the down payment on a first home, the closing costs associated with the purchase, or even the renovation of the acquired home.
What are the benefits of the FHSA?
- Tax-free growth: FHSA contributions and accumulated earnings grow tax-free, meaning you can increase your savings more efficiently.
coronation.com
graph showing the growth of an investment with and without taxes - Tax-free withdrawals: Withdrawals from the FHSA to buy a first home or cover associated costs are tax-free, allowing you to use your savings without incurring tax liabilities.
- Flexibility: You can use FHSA funds to buy a home anywhere in Canada, even if it is located outside of your province or territory of residence.
publicsafety.gc.ca
map of Canada with a house in each province - Compatibility with other programs: The FHSA is compatible with other housing assistance programs, such as the RRSP Home Buyers’ Plan (HBP).
Who can open an FHSA?
To be eligible to open an FHSA, you must meet the following requirements:
- Be a Canadian resident of legal age (18 years or older) on the date the account is opened.
- Not have owned a home in the past four years (neither you nor your spouse or common-law partner).
- Have a valid Social Insurance Number (SIN).
How to open an FHSA
You can open an FHSA at most Canadian financial institutions, such as banks, credit unions, and insurance companies. The opening process is simple and similar to opening a regular savings account.
Example of FHSA usage:
Mariana is a young professional who lives in Toronto and dreams of buying her first condo. She opens an FHSA and makes monthly contributions of $667. Over five years, Mariana contributes a total of $40,000 to her FHSA, which, thanks to tax-free growth, turns into $45,000. With these savings, Mariana can cover the down payment on her condo and fulfill her dream of owning her own home.
At Moneylatam, we are committed to helping you achieve your dream of buying a home in Canada. If you are looking to open an FHSA and need personalized advice, contact Héctor Bastidas, CEO of Moneylatam and Financial Advisor. He will guide you through the entire process and help you make the most of the benefits of this program.
