First Home Savings Account (FHSA)
Buying your first home is a major milestone, but it can also be an expensive endeavor. Fortunately, there’s a new tool that can help you save money on taxes and reach your homeownership goals faster – the First Home Savings Account, also known as the FHSA. As a homebuyer in Greater Edmonton and Sherwood Park, it’s important for you to understand how this account works and how it can benefit you because based on a household income of $60,000, it could literally put $2400 additional tax return into your pocket each year you use it.
What is a Tax Free First Home Savings Account?
The Tax Free First Home Savings Account is a savings account which helps you save money for your first home. The account allows you to contribute up to $8,000 per year and earn tax-free interest on your savings. When you withdraw the money to purchase your first home, you won’t have to pay any taxes on the interest earned.
How Does it Work?
To be eligible for a FHSA, you must be a Canadian resident over the age of 18 and have never owned a home before. You can contribute up to $8000 per year to the account, and your contributions are not tax-deductible. You can open a FHSA at any financial institution that offers the account, and you can have multiple accounts at different institutions, as long as you do not exceed the $8,000 contribution limit per year.
Benefits of a Tax Free First Home Savings Account
The biggest benefit to you of a FHSA is that you can earn interest tax free on your savings. This can help you save money on taxes AND help you reach your homeownership goals faster. Having an account specially designed for your first home’s down payment will also keep you focused on your goals and help you avoid spending your savings on other expenses.
Summary
If you are planning to purchase your first home in Edmonton and Sherwood Park, the FHSA Account can be a valuable tool to help you save money on taxes and reach your homeownership goals faster. By understanding how the account works and its benefits, you can make an informed decision about whether it’s the right choice for you. Contact us today to learn more about how we can help you with your home buying journey.
