A new product has been released for First Time Home Buyers. This would be something you as a realtor can talk to your clients about to help them prepare and save for their first home.
The FHSA is a cross between the the TFSA and RRSP accounts. This new product allows account holders to lower their taxable income like the RRSP and also allows the client to realized tax free gain and withdrawals from the account if the funds are used to purchase a home (see Qualifying Withdrawals from your FHSA).
Qualifying (Tax-Free) Withdrawal Criteria:
- You are a first-time homebuyer.
- You have signed an agreement to buy or build during the past 30 days.
- The acquisition or completion date of the home is before October 1 of the year following the withdrawal.
- The purchased home becomes your principal residence within a year.
Eligibility Criteria:
- You are over the age of 18
- You have not lived in a home that you or your partner owned in the past four years
- You are a resident of Canada
Qualifying Withdrawals from your FHSA
Qualifying withdrawals from your FHSA will not incur taxes. A qualifying withdrawal occurs if:
- You fill out the form RC725.
- You are a first-time home buyer.
- Your purchase or build agreement came into force over the past 30 days.
- You close the deal or complete the building by October 1st of the following year.
- You are and remain a resident of Canada until you close the deal.
- The purchased or built home becomes your principal residence within one year of closing.
Source: https://wowa.ca/FHSA-First-Home-Savings-Account
