What is a First Home Savings Account? Do I want one?

Summary

Unlock Your First Home Savings: James Loewen Introduces a Smart Solution for First-Time Home Buyers. Discover the benefits of a new home savings account combining RRSP and TFSA advantages. Maximize tax deductions and enjoy tax-free growth for your dream home. Start saving smarter, not harder.

Transcript

James Loewen:

Hey guys. Welcome back. If I seem excited, it's because I am. We've got a new home savings account available for first time home buyers. Now, we already have the first time home buyers account using your RSPs. We already have TFSA or your tax-free savings account. This is like a beautiful off child baby of them put together in so many awesome ways. I'm excited to get going. This is James Loewen, and now we're going to get your first time home savings going. This is Smarter Not Harder.

Okay, so let's first talk about how is it similar to an RRSP. When you put money into an RRSP, the benefit is it's a tax deduction. If you're in a tax bracket of 30%, you put $5,000 into there, you get 1500 bucks back. That still remains the same. So it's very much like an RSP contribution. The best parts, we love that.

Now let's talk about how it's similar to a TFSA. When you put money into a TFSA, any money that grows in there is also tax-free. This also has that, so unlike an RSP, which is tax deferred, any growth, whether it be interest, income or dividends, is fully tax-free. We also really like that.

Now, let's just talk about a few numbers, just so we understand a little bit of the nitty gritty on this one. Okay. Maximum allowance each year, 8,000 bucks. Instead of being a percentage of your income, like RSP, this is similar to a TFSA, eight grand a year. Total lifetime maximum $40,000, which isn't bad. The capital restriction, there is no repayment like the RSP plan. You don't have that 15 years to repay it back, but from the day you start the plan, you do have 15 years until you have to use it, when you buy your first home. If you don't buy a house, no problem. You don't lose the money, although you can give it to me. You can also just transfer it from your FHSA into your RRSP, and it doesn't eat up any contribution room.

The last bonus tip, when you take this money out and when you're buying a house, it does not have to be used for down payment. You can use it for land transfer, legal, moving costs or even buying your favorite mortgage broker a jacket that fits a little bit better. All right guys, so if you think I'm excited, I can't wait for you to share the excitement too. Any further questions, if you're looking to open one or how to use one, reach out. Myself and team are here, are nothing as you can tell, but excited to help. I'm James Loewen. Now your first home savings accounts are going, this is Smarter Not Harder.