The days are short, the year is coming to a close, the last thing we need is yet another thing to do.
BUT, if you:
plan on buying a home sometime in the future;
have some money that you can set aside; and
need a bit more of a tax deduction for 2023
...then the NEW First Home Savings Account (FHSA) might be for you.
The long story short though is that it is a mix of all that is good about a Tax Free Savings Account (TFSA) - the ability to save and earn money tax-free - and the RRSP Home Buyers' Plan - the ability to save specifically for a down payment on a home while enjoying a tax deduction.
What is special about it? Well, it's EXTRA. If you've maxed out your RRSP contributions and/or your TFSA space, you've got a new thing you can use to maximize your savings. It's FLEXIBLE. If you're hoping to buy a home at some point in the future, it's another tool you can use to save some money for it. If you don't use it for a home, it can be rolled into your RRSP/RIFF plans.
What do I need to know? For the 2023 tax year, all Canadians have a contribution limit of $8,000. To take advantage of it for this tax year, you will need to contribute by December 31, 2023 (for RRSPs, you have until February 29, 2024 to contribute).
Obviously, I'm not able to cover all of the details here - please read up on it and contact your bank or financial advisor for more information.
Let us know if we can help you with your 2023 tax preparation! Contact us today