Federal Government announces new Tax-Free First Home Savings Account
According to CBC:
Starting next year, Canadians will be entitled to contribute up to $8,000 per year to the accounts, which allow them to save and invest funds to buy a home in the most tax-advantageous way.
Currently, Canadians can use anything from a savings account to an RRSP or TFSA to save for their first home — but all come with a certain amount of tax restrictions.
The program has a maximum lifetime contribution limit of $40,000, and the government estimates the Tax-Free First Home Savings Account program will cost it about $725 million in tax revenue.
The new program adopts the most appealing parts of those two programs by giving savers a tax rebate for contributing and also allowing those savings to grow without being taxed on the gain. It’s “tax-free in, tax-free out,” as the budget puts it.
Finance Minister Chrystia Freeland said the government sees that as money well spent.
“We will make it easier for our young people to get those first keys of their own,” she said of the government’s various housing initiatives, which she described as “perhaps the most ambitious plan that Canada has ever had.”
Learn more here: https://www.cbc.ca/news/business/budget-housing-1.6412384
