Tax-Free Home Savings Account

The March 2023 Federal Budget brought into force the new Tax-Free Home Savings Account (TFHSA). This is a benefit for first-time home buyers in comparison to the current RRSP Home Buyer Plan. When using the RRSP Home Buyer Plan you save tax when you put money into the RRSP but eventually pay tax when you take it out. This is compared to the new TFHSA where you get a tax benefit putting the money in, and no tax is paid when you take it out 

Here are some of the highlights of the program:

1. $8,000 in annual contributions to a max of $40,000.

2. Co-applicants on a home purchase can each withdraw up to $40,000.

3. Must be between the age of 18 and 71 and resident of Canada.

4. Home buyer has up to 15 years from date of first contribution to use the funds to buy their first home.

5. Must be a first-time home buyer, defined as someone who has not owned a home in which they have lived at any time during the calendar year before the account was opened, or at anytime in the preceding four years.

There are additional details. For more information, feel free to reach out to me by email: john@canadianmortgagefinders.com