Who may open a First Home Savings Account?
To start a First Home Savings Account, you must do the following:
You must be a Canadian citizen.
You must be at least 18 years old.
You must be a first-time home buyer.
You are a first-time house buyer, according to the federal government, if you:
You must not have owned a house in which you lived during the calendar year before the opening of your FHSA.
You have not owned a house in which you have resided in the last four calendar years.
You will not be eligible for the program if you hold property through beneficial ownership, such as a corporation.
If you qualify, you can open a First Home Savings Account at any financial institution that accepts TFSAs and RRSPs, including banks, credit unions, life insurance companies, and Canadian trust organizations. An FHSA should not only be simple to open, but it should also be simple to operate.
You can deposit monies into your First Home Savings Account up to a $8,000 yearly contribution limit and a $40,000 lifetime contribution limit. One of the more intriguing features of the FHSA is that contributions are tax-deductible.
Your FHSA funds can be used to purchase a variety of investment products such as mutual funds, stocks, bonds, and guaranteed investment certificates. Another wonderful benefit is that you won’t have to pay taxes on any of the gains generated by these assets.
When you’re ready to buy your first home, you’ll send a request to your FHSA issuer confirming your ability to make a qualifying withdrawal. If all goes well, you’ll get your savings and be able to apply the entire amount to your down payment, deposit, or closing fees tax-free.
