Are you a first-time home buyer looking for a way to save for your down payment or know if someone who is? Look no further than the First Time Home Buyers tax-free savings account program! This new initiative allows Canadians to contribute up to $8,000 per year (up to a lifetime limit of $40,000) towards their first down payment within 15 years of opening their account. The best part? Contributions are tax-deductible, just like a Registered Retirement Savings Plan (RRSP), and withdrawals for the purpose of purchasing a first home are non-taxable.
So, who can open a First Home Savings Account (FHSA)? Any Canadian resident who is at least 18 years old and has not owned a qualifying home as their principal place of residence for the year the account is opened or the preceding four calendar years. You can contribute up to $8,000 in any given year, including 2023, when the program is set to launch. Unused contribution room can be carried forward, and you can even hold more than one FHSA, as long as the total contributions don’t exceed your annual and lifetime limits.
The FHSA can also be combined with the Home Buyers’ Plan, which allows you to withdraw up to $35,000 from your RRSPs to buy or build a qualifying home for yourself or a relative with a disability. Any amounts withdrawn under this plan must be recontributed to an RRSP on a non-deductible basis over a period not exceeding 15 years.
The FTHB plan allows you to receive the income tax break but unlike the old RRSP model you do not need to pay it back.
Overall, the First Time Home Buyers tax-free savings account program is a great way for Canadians to save for their first down payment while receiving tax relief. It’s a win-win situation that can help make the dream of home ownership a reality. Get started today to take advantage of the deadline to count for this years contributions.
We are always able to help with disputes and provide some insight on your specific financing needs. Give us a call to get started Patricia McKean 403.875.2969 or Stacey Scott 403.850.7738.
Visit our website at www.unbeatablemortgages.ca
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Patricia McKean, a Lead Planner with the Unbeatable Mortgage Team at Mortgage Architects in Olds, has over 20 years of experience in lending and has been successful in helping a number of our rural clients obtain mortgages in Alberta.
Mortgage Architects
Olds, Alberta
d. 403.875.2969 p. 403.637.0140 f. 866.465.2870
patricia.mckean@mtgarc.ca
PatriciaMcKean.ca