Latest news with #FHSA
Globe and Mail
02-06-2025
- Business
- Globe and Mail
With a new GST rebate coming, here's a refresher on other tax breaks for first-time homebuyers
The federal government is moving ahead with a new GST rebate for first-time homebuyers, which may complement existing programs aimed at making housing more affordable. Advisors who help clients, or their clients' children, navigate the purchase of a first home can broaden and deepen their relationship with both the client and family. 'It ends up putting you in situations in which you're having more holistic conversations with a client,' says Jason Heath, a managing partner at Objective Financial Partners Inc. in Markham, Ont. While some tax programs for first-time homebuyers are well known, others are sometimes overlooked and missed, Mr. Heath says. In general, to qualify for these federal tax programs, a first-time homebuyer is someone who has not lived in a home that they or their spouse or common-law partner owns either in the current year or any of the previous four years. Here are the key programs and credits that already exist, in addition to the proposed new first-time homebuyers' GST cut. The FHSA, introduced in 2023, allows a first-time homebuyer to save up to a lifetime limit of $40,000 toward a home purchase. Annual contributions of $8,000 (plus up to a maximum of $8,000 of carry-forward contribution room) to the FHSA are tax-deductible, while withdrawals from the account to purchase a qualifying home, including any growth, are tax-free. Ideally, a first-time homebuyer would open and begin contributing to an FHSA at least a few years before buying a home, Mr. Heath says, because FHSA contribution room begins to accumulate only after someone opens an account. However, a first-time homebuyer can still open an FHSA in the year they buy a home and contribute $8,000 before making a withdrawal. That's because there's no minimum number of days that contributions must be held in an FHSA before being used to make a qualifying withdrawal. What is a qualifying withdrawal? An FHSA withdrawal counts as a qualifying withdrawal if the account holder has a written agreement to buy or build a home by Oct. 1 of the following year, or has bought a home within 30 days before making the withdrawal. Also, the FHSA holder must not have lived in a home they owned in the year of withdrawal or any of the previous four years. Whether the FHSA holder lives in a home their spouse or partner owns isn't a determining factor when making a qualifying withdrawal. The HBP allows a first-time homebuyer to borrow from their RRSP to buy a home without being taxed on the amount. Last year, the federal government increased the amount that can be borrowed to $60,000 from $35,000. 'The old limits didn't allow you to access very much RRSP money,' Mr. Heath says, so the increased amount might allow for a bigger down payment. The borrowed amount generally must be paid back in instalments over 15 years. If the annual minimum repayment isn't made, that amount becomes taxable. Under a temporary change made last year, for withdrawals between Jan. 1, 2022 and Dec. 31, 2025, instalment payments don't have to begin until five years following the year of withdrawal, up from two years under the regular HBP rules. Unlike the FHSA, contributions to an RRSP must remain in the plan for at least 90 days before they can be withdrawn for purposes of the HBP. The Income Tax Act allows first-time home buyers to access both the FHSA and the HBP to purchase the same home. And spouses and partners can each use their own FHSAs and access the HBP to buy the same house. The HBA allows a first-time homebuyer to claim a non-refundable tax credit of $1,500 (which is calculated as 15 per cent of the $10,000 HBA). While the HBA is meant to help first-time homebuyers offset costs associated with buying a new home, those claiming the amount don't have to track expenses. If both spouses qualify as first-time homebuyers, the amount can be split between spouses but the total credit remains $1,500. (The Liberals have proposed a cut to the lowest income tax bracket from 15 per cent to 14 per cent, effective July 1, which would affect the value of the credit.) Mr. Heath says eligible homebuyers sometimes miss claiming the HBA if their tax software doesn't prompt them or if they don't inform their tax preparer that they've bought their first home. The credit is claimed in the year the home is acquired. Provinces and cities may offer their own tax breaks or credits for first-time homebuyers. For example, Ontario provides first-time homebuyers with a land transfer tax rebate, as does the city of Toronto.
Calgary Herald
07-05-2025
- Business
- Calgary Herald
Posthaste: High down payments keep Canadians out of homeownership
Article content Saving up for a down payment on a home is the main obstacle for 32 per cent of prospective homebuyers, according to a new survey, but that's just one of the many hurdles they're facing. Article content Thirty per cent point to high mortgage payments as their top barrier in home ownership, the survey by CPA Canada and BDO Debt Solutions said, but just 10 per cent preferred the flexibility of renting. Article content Article content 'The dream of owning a first home is slipping away for many Canadians,' Nancy Snedden, a licensed insolvency trustee and president at BDO Debt Solutions, said in a news release. Article content Article content 'With the cost of living on the rise, saving for a home has become increasingly challenging. It's concerning that only two per cent of non-homeowners in Canada are able to make their emergency fund a financial priority, while many are relying on credit to cover their expenses.' Article content Down payment amounts depend on several factors, but the minimum needed for a home valued at less than $500,000 is five per cent of the purchase price. For homes valued between $500,000 and $1 million, a five per cent down payment is required for the first $500,000 and 10 per cent for the remainder. Homes valued at more than $1 million require a 20 per cent down payment. Article content Under these general conditions, the average selling price from March of $678,331 would require a down payment of at least $43,833, but home prices are much higher in Canada's urban areas. Article content Article content 'Homeownership is closely tied to financial stability and wealth accumulation,' Li Zhang, a financial literacy leader at CPA Canada, said in the release. Article content Article content 'This is reflected in the behaviour of Canadians: homeowners are more likely to save for retirement and invest, while renters often live paycheque to paycheque. Only four per cent of renters report prioritizing lifestyle spending — most are simply struggling to cover the basics.' Article content It's become so hard to save for a down payment that Canadians are increasingly relying on their parents for support. A CIBC survey in 2024 said 31 per cent of first-time homebuyers relied on parental gifts for a down payment, compared to 20 per cent in 2015. Article content Despite the challenges, the federal government has tried to make saving for a down payment more accessible. Article content The first home savings account (FHSA) is designed to help first-time homebuyers with their down payments, offering savings accounts that work as both a tax-free savings account (TFSA) and registered retirement savings plan (RRSP).
Yahoo
29-04-2025
- Business
- Yahoo
Under 35? Here's How Your TFSA and RRSP Stack Up
Written by Puja Tayal at The Motley Fool Canada Rising inflation and interest rates in 2022 and 2023 reduced consumer spending and pushed Canadians towards savings. The Canada Revenue Agency (CRA) also pushed savings by increasing the Tax-Free Savings (TFSA) limit to $6,500 in 2023 and introducing the First Home Savings Account (FHSA). According to Statistics Canada data from the 2023 tax filing, tax filers in the 25–34 age group reported a median TFSA contribution of $4,500 and a median Registered Retirement Savings Plan (RRSP) contribution of $4,000. There was a balanced allocation between retirement and other savings. Interestingly, tax filers with taxable income above $40,000 had a median contribution of $8,000 in an FHSA, hinting that house buying could increase in the future. These contributions were only for 2023. Comparing your TFSA and RRSP savings with the median can give you a fair idea of how your savings are placed. According to Statistics Canada, singles under 35 had median assets worth $11,980 in their TFSA in 2023. This includes the net amount left after contributions and withdrawals. If you are 30 years old in 2025, your TFSA contribution room was $62,500 in 2023. The average TFSA balance was less than 20% of the contribution room because income is low in the early years of a career. Nevertheless, now is a good time to invest in a TFSA and make the most of the contribution room, as it allows your money to grow tax-free and you can even withdraw tax-free. Remember, time in the market is more beneficial than timing the market. If you find it difficult to invest a large amount in one go, adopt a disciplined investing approach. Every month, contribute 10% of your income to the TFSA. If you earn $4,000 a month, a $400 TFSA contribution might seem doable. As your income grows, so will your TFSA contribution. According to Statistics Canada, singles under 35 have a median asset worth of $16,220 in an RRSP in 2023. The RRSP balance is higher than the TFSA. One possible reason could be that RRSP withdrawals are taxable, which encourages Canadians to stay invested and spend time in the market. Following a similar discipline in a TFSA and staying invested can help you build tax-free wealth. Within a TFSA, you can build two portfolios: a core portfolio of evergreen growth stocks and a satellite portfolio of opportunistic stocks. An evergreen stock worth considering is Descartes Systems (TSX:DSG). The stock is caught in a seasonal dip and a bear market amidst the trade war. However, its secular growth is intact. Its Global Logistics Network and supply chain solutions, such as customs clearance and trade intelligence, have ample demand. Descartes's stock can continue to deliver an average annual growth rate of 20% in the long term as trade complexities increase cross-selling opportunities for Descartes. You can consider buying this stock in the second quarter of every year when it is seasonally weak, accumulating the dips. A $400 investment in Descartes in April 2015 would be $3,066 today. If we add up $400 for the last 10 years, the amount could be significant. Doing a rough calculation, a $1,200 investment every year ($400 x 3 months) for 10 years can grow your invested amount to $12,000 and portfolio value to $36,000, with the stock expected to grow at a compounded annual growth rate of 20%. Shopify (TSX:SHOP) could be an opportunistic buy now before it rallies 50–60% during the holiday season. There are fears of an economic slowdown amid the trade war. However, the Buy Canadian campaign and interest rate cuts could support local spending and drive holiday season sales. Even if Canada witnesses a tepid holiday season this year, the next year could see a sharp jump. This is a stock to buy in the second quarter and sell in the first quarter to make the most of seasonality. The post Under 35? Here's How Your TFSA and RRSP Stack Up appeared first on The Motley Fool Canada. Before you put a single dollar into the stock market, we think you'll want to hear this. Our S&P/TSX market beating* Stock Advisor Canada team just released their Top Stocks for 2025 and Beyond that we believe could supercharge any portfolio. Want to see what made our list? Get started with Stock Advisor Canada today to receive all of our Top Stocks, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned. 2025 Sign in to access your portfolio
Toronto Star
28-04-2025
- Business
- Toronto Star
Want to save for your first home and pay less tax? A First Home Savings Account helps you do both — here's how
When Amy Bergstrom learned about the First Home Savings Account (FHSA), she saw dollar signs. 'I was like, oh my gosh, I need to hop on this,' recalls the 23-year-old Edmonton property manager. 'Because that's free money.' Bergstrom is one of thousands of Canadians who contributed to a FHSA in 2023, according to new numbers from Statistics Canada. ARTICLE CONTINUES BELOW The down payment-builder is particularly popular among young people aged 25 to 34, who made up 57 per cent of the nearly 484,320 tax filers who put money toward the FHSA in its first year. But with it still being relatively new, you might be wondering, does it make sense for you? And wait — what was that about free money? Here's what it's all about, the upsides and downsides, and what your options are if you never end up buying that home. How the First Home Savings Account works The FHSA is designed to help individuals save for a down payment, and was introduced amid rising home prices. It combines aspects of both the Tax-Free Savings Account (TFSA) and RRSP (Registered Retirement Savings Plan), said Shannon Terrell, lead writer and spokesperson for Nerd Wallet Canada. To open an FHSA you must be between 18 and 71 years old and a Canadian resident. What you make on it is tax free, and the money you put in is tax deductible. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW 'Especially now with the housing market feeling particularly inaccessible for a lot of first-time buyers, every dollar that can be saved or sheltered from tax really matters,' Terrell said. You can put up to $8,000 per year into a FHSA, with a lifetime limit of $40,000. If you make $60,000 a year and you put $8,000 into the FHSA, when you file your taxes that year you can reduce your taxable income to $52,000, added Silvi Woods, manager of the financial planning team at Wealth Simple. Be aware that you start accumulating contribution room (the maximum amount you can put in for a year) once you open the account, which is why you might consider opening one even if you don't have the cash to spare, said Terrell, to 'get the clock ticking.' That's what Bergstrom did, putting in about $250 in late 2023. Her unused room from that year carried forward, so she was able to contribute about $10,000 in 2024. She now puts in $1,200 a month. Once you open the account you have 15 years, or until you turn 71, whichever comes first, to use it for a first home. 'The biggest restriction is that you must not own a home, you or your spouse or common-law partner can't have owned a home this year or four calendar years prior,' added Wealth Simple's Woods. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Although some young people like Bergstrom are taking advantage of the FHSA, there is still some confusion around how exactly it works, said Dan Broten, senior vice-president and head of EQ Bank. The bank recently conducted a nationally representative survey with Angus Reid Group and found a big 'gap between awareness and action,' he said. More than 80 per cent of Canadians aged 18 to 34 had heard of the FHSA but fewer than one in five had opened one. 'What our data showed is that there's still a lot of confusion around some of the technical elements — like contribution limits, lifetime maximums and how long someone can hold an FHSA,' he added. 'It's worth taking the time to understand how it works and how it can fit into your bigger financial picture.' The upsides Unlike the Home Buyers' Plan (HBP), which allows you to take money out of an RRSP for a home, you don't need to pay the money back, said Woods, who is also a certified financial planner and certified financial analyst. But you can use it in combination with the HBP. When you open an FHSA, you can decide what to do with the money. You can put it into a variety of different things, such as stocks, bonds or mutual funds, Terrell added. Or you can park it in a savings account, with just the interest on that. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW If your investments grow to more than $40,000, you can take those earnings out tax free as well to purchase your first home. This is not considered over-contributing. For example, if your $40,000 turns into $50,000 over the years through wise investments, you can take out the full $50,000. Terrell said people often don't realize they can put their money to work like this, especially if they start early. It's also important to think about when you need the funds, as a longer time frame in general means it makes sense to take on more risk. For example, if you know you won't buy a home for 10 years, your investments would have time to recover from stock market losses. But if you're looking to purchase in the near future, you might want to look at a more conservative investment, like a Guaranteed Investment Certificate (GIC), according to Terrell. You can also delay reporting contributions to reduce taxes in a future year, said Kevin Burkett, tax partner at Burkett & Co. Chartered Professional Accountants in Victoria, B.C., as 'unused room carries forward.' ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW For example, if you just graduated and are only making $15,000, and 'you're able to put a few thousand into an FHSA, you could claim that a couple years later when you actually are earning $40,000 a year and you want to lower your tax,' said Woods. What to watch out for One thing to be careful about, said Terrell, is not over-contributing, or you'll be taxed at one per cent per month on the excess amount. You also need to be buying a first home for yourself, not a rental property, when you pull the money out. The account shouldn't be treated as an emergency fund, or to dip into for big expenses like a wedding or car, said Woods. That's because if you remove the money for something other than a home, you'll be taxed on the withdrawals. If you are looking for something more flexible, said Woods, the TFSA is the product for you. If you can, you might want to consider opening both, Woods added. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW What if I never buy a home? Bergstrom is optimistic that she'll be able to save a down payment for a single-family home in Edmonton in a few years. Her budget for her first home is up to $400,000. But with Toronto's prices, that dream is still unrealistic for many young people. An FHSA is not going to magically put a $1.2-million semi in a good school district within your reach overnight. The good news is that even if you don't end up buying, you can transfer the money to your RRSP, said Terrell. 'It doesn't even eat into your RRSP contribution room, so for a lot of folks it's a win-win.' Although popular among millennials and gen-Z, it's an 'overlooked tool' for older renters, because it can roll into retirement savings, said Woods. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Burkett often sees younger people asking for an RRSP because their parents have told them that's the best option. But even if they don't ever want to own a home and are just trying to save for retirement, he'd still advise them to look at the FHSA. 'You really need to understand the characteristics of the plan, beyond just the simple name,' he said.
Yahoo
10-02-2025
- Business
- Yahoo
Canadian disruptor, Questrade, introduces $0 trade commissions
TORONTO, Feb. 09, 2025 (GLOBE NEWSWIRE) -- Questrade ( -- Canada's #1 rated¹ online brokerage -- eliminates trading commissions on its platforms, further empowering Canadians. 'We are continuing our tradition of disrupting the industry,' said Edward Kholodenko, president and CEO, Questrade. 'We believe Canadians should keep more of their money, and $0 commissions, coupled with our industry-leading platform, will help them do just that - whether they are just starting out or are highly sophisticated traders.' The new $0 pricing, which is now live, will allow Questrade customers to trade Canadian and U.S. listed equities and ETFs commission-free, with options as low as 75¢ per contract². Because news this big needed a launch to match, Questrade partnered with actor Gabriel Macht. Known for portraying characters who 'get theirs,' Gabriel introduces Canadians to the idea of $0 commissions being the way for you to finally 'Get Yours.' Macht says, 'I really respect what Questrade stands for as a brand, to me the partnership was the perfect fit.'Questrade, a 100% Canadian-owned independent brokerage, has a long history of providing value to Canadians. It was first to reduce trading fees to $9.95, when most brokerages charged $30 or more. Then, Questrade introduced the $4.95 stock trade, and shook things up again with stock trading for as little as one cent per share. However, the company's innovation isn't just its pricing. On top of $0 commissions, Questrade has an unmatched suite of offerings, such as: Being the first Canadian broker to offer the First Home Savings Account (FHSA), helping customers save for a home faster Award-winning customer service³ Edge platforms for advanced traders, available on mobile, web, and desktop Complex order types, such as multi-leg options Seamless integration with 30+ platforms, including TradingView and Passiv Lower fees for better returns with Questwealth Portfolios⁴ Free U.S. dollar (USD) accounts 'We are obsessed with helping our customers build a better financial future - that's our mission,' said Kholodenko. Awards and Recognition Ranked best online broker in Canada by MoneySense in 2024 Awarded best mobile experience (2024) and best service experience (2025) by Surviscor Awarded the DALBAR Seal of Service Excellence for the seventh consecutive year in 2025 About Questrade Questrade, Inc. ('Questrade') is changing the Canadian financial services industry by leveraging technology to lower fees while providing a viable alternative to traditional financial investment options, thereby allowing Canadians to Keep More of their Money. As a leader and innovator in financial services, Questrade is a trusted ally that advocates for consumers, focused on improving value. With 25 years of challenging the status quo as one of Canada's leading, non-bank online brokerages and over $50 billion in assets under administration, Questrade and its affiliates provide financial products and services, including securities and foreign currency investments. For more information, visit or on Facebook and X (formerly Twitter) @Questrade. Questrade, Inc. is a registered investment dealer, a member of the Canadian Investment Regulatory Organization (CIRO), and a member of the Canadian Investor Protection Fund (CIPF). Questrade is a wholly owned subsidiary of Questrade Financial Group Inc. ¹MoneySense 2024 ²For options trades placed online through the Questrade, Inc. website or mobile apps, the base commission has been reduced to 0.99¢ per contract. The per contract rate for online options trading is further reduced to 0.75¢ if subscribed to an active trader plan. ³In 2025, Questrade was awarded the DALBAR Seal of Service Excellence for the seventh consecutive year. The recognition is given to firms across the financial services industry that demonstrate standout customer service and an exceptional standard of care, including telephone interactions and service delivery. ⁴ Media Contact For more information, contact Susan Willemsen at The Siren Group Inc. Tel: 416-461-1567 or M: 416-402-4880, or email: susan@ A photo accompanying this announcement is available at
