Just introduced in 2023, the First Home Savings Account is a tax-efficient way for Canadian Residents to save for their first home (or first home within 5 years). Contributions to this account are eligible for a tax credit (similar to an RRSP). The main benefit is that any investment growth in the account, as well as the original contribution, are completely tax free when withdrawn if used to purchased a first home within the designated time period.
The first step is to set up an account with your bank or investment advisor, you will then begin earning contribution room (allowing you to contribute up to $8,000 per year). The lifetime contribution limit is $40,000, and the home must be purchased within 15 years of when the account is first established. This is a great way to save for your first home and save on your tax return at the same time – giving you even more cash flow to save towards that first home!
