RBC is among the first of Canada\u2019s big banks to launch the new tax-free First Home Savings Account (FHSA). Hopeful first-time homebuyers now have a new tool at their disposal to make homeownership more attainable. <\/p>\n\n\n\n
The Canadian government had stated that Canadians would be able to open FHSA accounts as of April 1, 2023. RBC is the first of the big six to launch, with other big banks expected to launch FHSA accounts later in 2023. <\/p>\n\n\n\n
\u201cWe wanted to make this account available as quickly as possible, so Canadians can start making their FHSA contributions and investing those funds,\u201d says Erica Nielsen, executive vice president, personal banking & investments, RBC. <\/p>\n\n\n\n
One of the biggest hurdles to homeownership, beyond high housing prices, is the challenge of saving for a downpayment. With real estate values outpacing incomes, and the cost of living continuing to stretch households, it can take years to save the required amount to buy a home, while housing prices continue to climb. <\/p>\n\n\n\n
The introduction of the FHSA provides new savings options with tax benefits that can boost prospective first-time homebuyers onto that first rung of the property ladder. <\/p>\n\n\n\n
\u201cThis new savings and investing account will be a tremendous support to anyone who has that dream,\u201d says Nielsen. <\/p>\n\n\n\n
With the FHSA, the account holder can contribute up to a maximum of $40,000. If funds are not used to purchase a house within 15 years of the account being opened, the funds can be transferred to an RRSP or RRIF. Or if the account holder turns 71 prior to funds being withdrawn, at the end of that year, funds can be transferred to a RRIF. <\/p>\n\n\n\n
What\u2019s particularly appealing about the FHSA is that returns the account generates can be applied to a home purchase. It\u2019s a compelling reason to start investing sooner rather than later to benefit from potential long-term gains, as Nielsen explains. <\/p>\n\n\n\n
\u201cThe big plus is that any investment gains within your FHSA can also go toward your home purchase, on top of your $40,000 FHSA lifetime contribution maximum,\u201d she says. <\/p>\n\n\n\n
The FHSA acts as a complement to other savings options Canadians have been using to save to buy a home: including RRSPs and TFSAs. <\/p>\n\n\n\n
House hunters who have already been contributing to their RRSP to make withdrawals for a house purchase through the Homebuyers Plan (HBP) will be pleased to learn that they can combine HBP and FHSA funds to buy a home without affecting contribution limits for the HBP or RRSP. <\/p>\n\n\n\n
What this means is that homebuyers who take full advantage of both the HBP and FHSA program could use up $75,000 ($150,000 per couple) with any earnings generated from the investments on top of that. <\/p>\n\n\n\n
Quick FHSA facts: <\/p>\n\n\n\n
RBC launches their First Home Savings Account, providing first-time homebuyers with a new tool to achieve the dream of homeownership.<\/p>\n","protected":false},"author":56,"featured_media":227332,"comment_status":"closed","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"content-type":"","apple_news_api_created_at":"2023-04-21T16:28:32Z","apple_news_api_id":"3326f5c9-ee87-4d6c-83a0-0273d13f1013","apple_news_api_modified_at":"2023-04-21T16:28:32Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/AMyb1ye6HTWyDoAJz0T8QEw","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[11108],"tags":[11132,11221,11236,11226,11163],"coauthors":[10869],"apple_news_notices":[],"yoast_head":"\n