Buying your first home in Canada is an exciting milestone in life. For some, however, it may be challenging to save up for a down payment. You will be pleased to know that help is at hand through a new registered savings plan called First Home Savings Account (FHSA) introduced by the federal government.
With the First Home Savings Account (FHSA), qualifying individuals now have a valuable new tool at their disposal as they strive towards their homeownership goals. In this article, we’ll clearly explain what you need to know about the FHSA.
The First Home Savings Account or FHSA is a new registered plan that can help you save towards the purchase of your first home. It offers unique benefits, including tax advantages, that make it an attractive option for those looking to purchase their first home in Canada.
Launched by the federal government in April 2023, qualifying individuals can now open an FHSA account and begin saving for a first home tax-free, up to $8,000 per year with a lifetime amount of 40,000.
FHSAs have an annual contribution limit of $8,000 and a lifetime contribution limit of $40,000. When used properly, FHSAs can be an important part of a first-time homebuyer’s down payment savings strategy.
1. Plan your mortgage:
When coupled with a TD Mortgage Affordability Calculator, an FHSA with TD can make it easier for you to calculate your mortgage affordability and the down payment that will be most comfortable for you based on your financial situation.
2. Personalized advice:
At TD, the aim is to assist newcomers in achieving financial success. Your TD advisor is there to help define your own personal investing goals and recommend plans, like the FHSA, to help you move towards your dream of home ownership with confidence.
3. Flexible investment options:
Unlike a traditional savings account, a TD Multi-Holding First Home Savings Account allows you to place your contributions in various investment alternatives, including cash, GICs, and mutual funds.
The home you plan to buy should be your primary residence and not intended for rental purposes.
The First Home Savings Account is an excellent option for newcomers entering the world of homeownership. It provides a tax-advantaged way to save specifically for your first home, with the flexibility to invest your contributions. When you’re ready, opening an FHSA can be a straightforward process that sets you on the path to achieving your dream of homeownership in Canada.
TD has a proud history of delivering financial solutions to Canadians for more than 150 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.
Legal Disclaimer: Information provided by TD Bank Group and other sources in this article is believed to be accurate and reliable when placed on this site, but we cannot guarantee it is accurate or complete or current at all times.
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