Canada Tax-Free First Home Savings Account:
- The account will be available starting April 1, 2023
- This is a registered plan that allows prospective first-time home buyers to save up to $40,000 tax-free for a downpayment on a home.
- Contributions are tax-deductible like an RRSP
- Money withdrawn from the account will be non-taxable like a TFSA
- The annual contribution limit is $8,000 and the lifetime contribution limit is $40,000 as of April 1, 2023.
- Canadian residents who are 18+ and who have not owned a home in the past 5 years are eligible to open the account.
- The Account must be closed after 15 years of opening or when the account holder turns 71 years old.
- Savings can be used to buy a qualifying home or transferred to an RRSP, RRIF, or withdrawn on a taxable basis.
- The account can hold the same qualified investments as a TFSA. Common investment methods are listed below:
- Mutual Funds
- Securities listed on a designated stock exchange
- Guaranteed investment certificates (GICs)