The 2022 Federal Budget details a new First Home Savings Account (FHSA) that allows first-time home buyers to save funds for a down-payment on a home, on a tax-free basis, starting in 2023. It is a sort of hybrid between RRSP and TFSA's, whereby contributions to the FHSA are tax-deductible like RRSP's, and withdrawals to purchase a home, including investment income, are non-taxable, similar to a TFSA.
The annual contribution limit is $8,000, and there is a lifetime contribution limit of $40,000. Any financial institution should be able to assist you in issuing FHSA's, similar to RRSP and TFSA's. An individual would be allowed to carry forward unused portions of their annual contribution limit, up to $8,000, and subject to the $40,000 total limit.
To be eligible for the FHSA, the individual must be a Canadian resident and over 18 years of age. They must also be a first-time home buyer and under the age of 71.
An FHSA may only be open for 15 years. An individual's account would cease being an FHSA upon the 15th anniversary of the individual opening the FHSA, or upon turning 71. Any amounts not used to purchase a house may be transferred tax-free into an RRSP or RRIF, otherwise it must be withdrawn on a taxable basis.
Please contact your LFG Advisor for further details.