This year will be the first time the Tax-Free First Home Savings Account (FHSA) will be available to prospective homebuyers and one tax expert said he doesn't see any downsides to contributing.
Jamie Golombek, a managing director of tax and estate planning at CIBC Private Wealth, said in an interview with BNN Bloomberg Thursday that the FHSA combines many of the benefits of a Registered Retirement Savings Plan (RRSP) with those of a Tax-Free Savings Account (TFSA).
“So it's better than an RRSP because with an RRSP, you get a deduction on the way in but eventually when you take it out in retirement you have to pay tax,” Golombek said.
“This [FHSA] accomplishes both. You get a deduction on the way in and no tax on the way out, provided you buy that first home within a 15-year period.”
The FHSA is scheduled to be available in April. It allows homebuyers to annually deposit up to $8,000 tax-free, with a maximum of $40,000.
Check out the full video at the top of the article to learn more.
