A Tax-Free First Home Savings Account (TFFHSA) allows a first-time home buyer to set money and receive a tax deduction. C
- Contributions are tax deductible (like an RRSP);
- Withdrawals (when you buy a house) are tax free (like a TFSA)
- Lifetime contribution limit: $40,000
- Annual contribution limit: $8,000 (but you can catch up on contributions from prior years)
- One time only; you can only use a TFFHSA to buy one home in your lifetime;
- You can invest in stocks, bonds, ETFs, GICs (like a self-directed TFSA or RRSP)
- Can remain open for 15 years, or until you turn 71 years old.
Should I Use a Tax-Free First Time Home Savings Account?
- You or your spouse have never owned a home, or haven’t owned a home in the previous four years;
- Saving for a home is a greater priority than saving for retirement, or for your children’s education;
- You are confident that you can purchase a home within 15 years
Debt Free in 30 podcast discussing TFFHSAs:
Department of Finance: Design of the Tax-Free First Home Savings Account
Tweet thread from Mark McGrath summarizing the Tax-Free First Home Savings Account
CMHC requirements for homeowner mortgage loan insurance