Buying a house this year? These are the top 3 tax strategies to use
Nearly one in five Canadians aged 18 and up say they “probably will or may” buy a home in 2024, according to a new Wahi Realty Inc. survey of Angus Reid Forum members that looks at homebuyer intentions for the new year as well as what they are doing to make their ownership dreams come true.
To that end, the survey found that many are planning to make sacrifices, including spending less, working longer hours or taking on a side hustle.
If you’re thinking of buying a home in 2024, and this is your first home, there are a few tax incentives you should be considering. Let’s review the top three tax strategies.
Launched in 2023, the FHSA is a new registered plan that gives prospective homebuyers the ability to save $8,000 per year, up to a $40,000 lifetime limit, on a tax-free basis towards the purchase of a first home in Canada. The FHSA combines the best feature of the registered retirement savings plan (RRSP), a tax-deductible contribution, with the most attractive feature of the tax-free savings account (TFSA), the tax-free withdrawal of all contributions, investment income and growth earned in the account when used to buy a first home.
To open an FHSA, you must be a resident of Canada and at least 18 years of age. The FHSA’s definition of a first-time homebuyer is that you don’t live in a qualifying home as your principal residence, which is owned, jointly or otherwise, either by you or your spouse or common-law partner in the calendar year in which the account is opened (prior to the home purchase), or in the preceding four calendar years.
Just like RRSP contributions, you don’t have to claim the FHSA deduction in the year you make the contribution. The contribution can be carried forward indefinitely and deducted in a
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