Questrade's Tax-Free First Home Savings Account: A Dream Come True for Canadians
For many Canadians, buying their first home is a significant milestone. However, it can be challenging to save enough for a down payment while also dealing with everyday expenses. That's where Questrade's new Tax-Free First Home Savings Account (FHSA) comes in.
Expected to launch on April 1, 2023, the FHSA is a unique savings option that combines the benefits of a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP). It's available to Canadian residents between the ages of 18 and 71 who haven't owned a home in the last four years.
The FHSA offers several benefits that make it an attractive option for first-time homebuyers. For starters, it allows investors to grow their savings tax-free. Contributions to the FHSA are tax-deductible, similar to an RRSP, which can help reduce your income tax bill. Moreover, any gains or interest earned on investments within the account are also tax-free.
When you're ready to buy your first home, you can withdraw the funds from the FHSA tax-free, as long as you meet the eligibility criteria. If you have any leftover funds, you can transfer them to an RRSP or Registered Retirement Income Fund (RRIF) without penalty.
But that's not all. The FHSA also allows investors to invest in a variety of assets, including stocks, ETFs, GICs, and bonds. This feature gives your savings the potential to grow beyond the account's maximum contribution limit.
It's worth noting that the FHSA has its own contribution limits. For 2023, the maximum amount you can contribute to the account is $6,000. However, any unused contribution room can be carried forward to future years.
In summary, Questrade's FHSA is an excellent option for first-time homebuyers looking to save for a down payment while also enjoying tax benefits. To make the most of the account, it's essential to understand its rules and contribution limits. With the FHSA, Canadians can take a step closer to achieving their dream of homeownership. So, if you're eligible, consider opening an account today and start saving for your first home! www.Questrade.com Follow the tabs Learning / Investment concepts / FHSA 101
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