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In this video we'll cover everything you need to know about the FHSA (First Home Cost Savings Account). We'll go over the advantages, contribution limits, mistakes to avoid, and so much more!
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Can a husband and a wife both max their FHSA, then buy a house together taking the money from their FHSA? So like, instead of having $40,000 to make a down payment, they would have $80,000 after maxing the account in 5 years (excluding investment gains to make it easier)?
Yes, as long as both are first time home buyers, they can open their own FHSAs and use the funds to contribute to their home
@@pepto_ thank you for the info!
Does this mean that once i get a house i need to withfraw the funds within 30 days? Or if its a new build within one year. I found that part confusing. 😊
Great video. You certainly covered my questions about this. Thank you for sharing!
Hey Brandon, Thanks for the video! Does a a transfer to a RRSP take the ceilling contribution into account? By that I mean, if someone don’t end up buying a house can they still transfer their FHSA account into an RRSP that has maxed contributions or would be maxed due to the transfer?
This would be “additional RRSP space”, allowing you to go over thee “Ceiling” of RRSP room alone
@@beaviswealth Thank you!
Quick question Brandon, let’s say you’ve already opened a FHSA with an investment firm and are not happy with the returns of the first two years with them. Could you open a second FHSA account on a different platform like WealthSimple and contribute the remaining funds into there without issue? I feel like picking my own stocks is going to yield higher returns in my opinion.
Yes I believe there would be no issue at all with that 👍🏼
Possibly looking at a low cost ETF would likely help with at least outperforming based on the fees alone
I’d prefer to max out my TFSAs and RRSP account rather than opening another fancy account and doing back and forth. IMHO I’d stick to traditional accounts rather than follow the mandatory fancy idea of saving 8k X 5 years. In any case most home buyers know the 40k is hardly going to cover 30% down payment. So better to plan own finances as per your own investment and savings accounts rather than add8ng another fancy confusion.
I mean…. the FHSA just rolls into an RRSP if you don’t use it. Huge tax benefit if you use it for a house, otherwise its the exact same as an RRSP. Absolutely nothing about this account is fancy or confusing. 40K in an FHSA would be a 12k tax return over 5 years for a very average marginal tax rate. Invested at a modest 5% return would look something like 60.5k after 5 years [46.5k FHSA, 14k other].
The tax efficiency and benefits of this account really should not be downplayed. But I guess you do you.
@@ScurvyDave I agree with your points and surely it combines benefits of both but not significant enough. However if it’s the exact same as RRSP then I’ can contribute to RRSP itself and benefit tax-wise. Another option is to put in TFSA and have full flexibility so even if I don’t buy a home I can leave investments As Is or 2ithdraw without any restrictions. With TFSA I don’t have to roll it in to an RRSP on withdrawal, whereas FHSA forces one to roll in to RRSP or get taxes on withdrawal. I think I used the word fancy instead it’s nothing new – if one can max out TFSA and RRSP every year for 5 years and consist3ntly saves and invests he or she can achieve down payment goal without the FHSA account.
@@sridharv3903 Yea but the RRSP is a tax deferral, and the TFSA is post-tax. FHSA is completely tax free if used for its indented purpose. It makes absolutely no sense to contribute to an RRSP outside of an employer match if you have FHSA room. Sure, you can save for a down payment in a TFSA, but a FHSA will go so much further.
I have no idea how this is even a discussion. 40k of lifetime tax free investing room on top of regular tax sheltered accounts, PLUS 40k @ marginal rate tax return. This is absolutely significant. This would be like saying that 6 years of TFSA contribution room AND a tax refund on the amount contributed is “not significant enough”.
Not sure what else to say here. It would be completely irresponsible to not utilize this account, or to contribute to an RRSP over it.
Question
What if I have FHSA with 16k. I decided to buy a house, but did not use FHSA money. Can I keep investing till I hit 40k then transfer to RRSP?
…wonders if one can actively trade stocks/options within the FHSA without the CRA penalizing you afterwards like they would in a TFSA…? 🤔
Very useful 8nfo as always. I didn’t know about tax deductions
Talking about a drop in the bucket, saving a few thousand dollars for a house priced at millions of dollars?
Just to add to make it clear, carry forward of unused contribution is maxed at $8k. So even if you have a FHSA account open for 10 years for example, you will only have $16k space to contribute.