Tax-Free First Home Savings Account (FHSA)

You may have heard about the Tax-Free First Home Savings Account (FHSA) that will be available to Canadians in 2023. At its core, the FHSA is a cross between a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP). Let’s explore this a little further.

Empower the Next Generation: Explore the Benefits of a Tax-Free First Home Savings Account

For those of you who have children, you may understand the challenges younger generations face as they try to enter into the housing market — all while coming up with that 5-20% down payment required to secure a home and qualify for mortgage financing.

A frequent theme that comes up during financial planning reviews is assisting their children or grandchildren with their first home. Typically we will discuss some options available to assist with the initial down payment, while also keeping in mind the complexities of gifting funds and/or marital breakdowns to protect both the parents/grandparents and the children/grandchildren should something unexpected occur. Depending on a number of details, including stage of life, future plans, taxable income, current savings in place, etc. — a new strategy to consider could stem from the new FHSA. Outlined below are some of the benefits and accounts to consider if you are thinking of helping out the younger generation.

As with every decision there are pros and cons to the FHSA, HBP and TFSA for the purpose of a house down payment. Your Plena Team is here to help walk you through options, discuss your decisions and answer your questions.

Information in this article is from sources believed to be reliable; however, we cannot represent that it is accurate or complete. It is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell securities. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The views are those of Plena Wealth Advisors, and not necessarily those of Raymond James Ltd. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decision. Raymond James Ltd. is a Member Canadian Investor Protection Fund.