Canada's First Home Savings Account (FHSA)
The Government of Canada announced that Canada’s First Home Savings Account (FHSA), a program designed to help eligible prospective first-time home buyers save money for their first home, with tax incentives, will be rolling out for April 1, 2023. We invite you to read more about the Canada First Home Savings Account (FHSA).
How to Open a FSHA.
How to close a FHSA.
According to the Government of Canada, your maximum participation period begins when you open your first FHSA and ends on December 21 of the year in which the earliest of the earliest of: the 15th anniversary of opening your first FHSA, you turn 71 years of age, the year following your first qualifying withdrawal from your FHSA. To avoid unintended tax consequences, you should close all of your FHSA’s before your maximum participation period ends. Note that if you withdraw any remaining property as a taxable withdrawal, you must include this amount as income on your income tax and benefit return for the year the amounts are received. If property remains in your accounts after your maximum participation period ends, and they lose their status as FHSAs, you must include the fair market value of all of the property in your FHSAs as of the end of the day on December 31 of that year, as income on your income tax and benefit return for that year.
Tax Deductions for FHSA Contributions.
In addition to the aforementioned information that DV Capital has summarized to you about the Canada First Home Savings Account, there are many other aspects and points of consideration including rules surrounding FHSA withdrawals, transfers between FHSAs and other registered plans, tax deductions for FHSA contributions, non-residents and FHSAs, participating in FHSAs, over-contributions or transfers to FHSAs, marriage and common-law partnership and FHSAs and the definitions of FHSAs in the eyes of the Government of Canada. As this information cannot be interpreted or relied on as legal or taxation advice, it is important for you to consult with a professional accountant and/or lawyer for taxation strategy, advice and opinions if you wish to learn more about Canada’s First Home Savings Account (FHSA).