As the year draws to a close, so do opportunities for new home buyers in Canada to get some much-needed help to see their dream of homeownership become a reality in 2024.

Meet Jaelen who has rented for years and wants to buy a house. Jaelen has been saving but could still use some help and is eager to qualify for Canada’s first-time home buyer’s account called First Home Savings Account (FHSA).

Jaelen has reviewed the qualification criteria and meets the age requirement of being 18-71.

The FHSA is a great way for Jaelen to start saving for that first home by making tax-deductible contributions into an account and later making withdrawals that are tax-free if that money is used toward the purchase of qualifying primary residence in Canada. More on that a little later.

How will Jaelen do it?

Let’s first look at allowable contributions.

• Up to $8K per calendar year with the ability to carry up to $8,000 forward if an account is opened (meaning a potential $16,000 limit in one year),
• Up to a lifetime maximum of $40K over a 15-year period.

Withdrawals

Along with being tax-free, withdrawals can be combined with funds from a Tax-Free Savings Account or RRSP Home Buyer’s Plan.

They can also be combined with another person’s FHSA when purchasing a home together.

Once Jaelen is ready, there are some important options to consider and follow when deciding to close the FHSA.

• It must be closed in the year following the purchase of a qualifying home, or
• Within15 years of the account opening date, or
• By December 31st of the year the buyer turns 71.
• Funds can be transferred to an RRSP or RRIF tax-free prior to the FHSA closure.

The FHSA could be a pivotal step toward making Jalen’s dream of home ownership a reality.

The FHSA does have some more stringent criteria than other registered plans, but for the right person, like Jaelen – and many other Canadians, this account combined with the right advice could make home ownership a reality.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor, Nicolle Lalonde.