Update on Canada’s new registered plan for aspiring homeowners
In 2022, the federal government announced plans to create a new program to offer Canadians a tax-free way to save for their first home – the First Home Savings Account (FHSA). Recently, the Canadian Parliament finalized legislation for financial institutions to begin offering this new registered savings vehicle.
With this announcement, BlueShore Financial is now working to make the FHSA available to our clients. Our current phased-plan is to release a limited number of FHSA products by the end of 2023, with the full FHSA product suite available to clients in 2024. Background The FHSA is a registered savings vehicle introduced by the Canadian Government aimed at helping Canadians save for their first home.
Product highlights include:
- This new registered plan will give prospective first-time home buyers the ability to save $40,000 on a tax-free basis.
- Like a Registered Retirement Savings Plan (RRSP), contributions will be tax-deductible, and withdrawals from the plan to purchase a first home—including from investment income—will be non-taxable, like a Tax-Free Savings Account (TFSA).
- Individuals can save up to $8,000 per year in a tax-free account, with a maximum contribution room of $40,000. Unused contribution room will roll over to the next year, but the amount carried over from previous years is capped at $8,000.
Full details on the FHSA and its backing legislation are available on the Government of Canada website. Watch for more details from BlueShore as we develop this product.
To register your interest in signing up for FHSA at the earliest opportunity, please contact your Financial Advisor or our Solution Center.