Benefits/Eligibility
Who qualifies for the FHSA
first time home buyer, you must be 19 to 71 years of age and you must be a Canadian resident
what is the life time contribution limit
$40,000
Qualifying withdrawals are tax free - what is the criteria for this?
you must make the withdrawal within 30 days of moving into your new home or have a written agreement to buy or build a qualifying home before October 1 of the year following the withdrawal
what are FHSA Investment options?
savings accounts, term deposits, Mutual funds, stocks and bonds
Maximum withdrawal limit of $35,000- FHSA or Home Buyers Plan?
HBP
What is the purpose of FHSA?
to save for your first home, when you contribute you get a tax free deduction
what is the annual contribution limit?
$8,000 in any year including 2023
How long can the plan stay opened?
a maximum of 15 years or until the end of the year you turn 71 (which ever comes first). Once you make the qualifying withdrawal to buy a home, you have one year to close the account. After either of these situations, you cannot open a new FHSA
what happens upon death of the FHSA plan holder?
transfer to the successor in case of a spouse or transfer to the Estate.
can on person have both a FHSA and Home Buyers Plan
yes
what qualifies as a first time Home Buyer
member or members spouse, common law partner did not own a qualifying home that they lived in as a principle residence at any part of the calendar year before the account was opened or the preceding 4 years
What are the Carry forward rules
if you don't make the full contribution, you can carry forward up to $8000. in total unused contributions to a future year(you can't miss 2 years contributions and save up to $16,000 in room like a TFSA).
what happens to the money left in the plan when it closes?
If there is money left inside your FHSA when it closes, you can arrange for all of it to be transferred tax free to your RRSP or RRIF. this doesn't depend on having contribution room available. If you don't transfer to an RRSP or RRIF, you can simply withdraw the money but it will be taxed.
what's the maximum amount a person would be able to use for a down payment on their first home if they used the maximum in both FHSA and HBP
$75,000 - FHSA $40,000 + $35,000 HBP
withdrawals are tax free and do not need to be repaid
FHSA
What happens if you do not buy use your FHSA to buy a house
what are the tax benefits
when you contribute , you can deduct the full amount of your contribution against your income. You can claim this deduction either the year you contribute or in any future year. Example: it may make sense to delay using the deduction if you expect your taxable income to be higher in future years.
how to you withdraw from your FHSA?
you must fill out the form RC725 to make a request to withdrawal from your FHSA, once filled out you give it to your FHSA issuer
can a person have more than one FHSA?
yes - but must follow the rules one one plan. Maximum contribution $40,000 between the both. Works like TFSA. They must be very careful not to over contribute.
withdrawals are made from an RSP
HBP
name 3 benefits of the FHSA
save towards the purchase of a first home
contributions are tax free
income is tax free
withdrawals towards a purchase of a first home are tax free
multiple investment options
what if you contribute too much?
there is a 1% penalty every month on over contributions for as long as they remain in your FHSA.
When you withdraw from your FHSA do you have to repay that amount?
no
Who can open an FHSA?
FSM, IS, IA and any confident CSS
lifetime contribution limit of $40,000
FHSA