Let's get straight to the point, especially if you're a first-time homebuyer in Canada. Time is of the essence. Opening an FHSA (First Home Savings Account) should be at the top of your to-do list. If you don't act before January 1, 2024, you're waving goodbye to the chance of having $8,000 in that account. Now, let's break it down.
The FHSA, introduced in 2023, is designed to assist Canadians in the quest for homeownership. With the consistent rise in home prices, having tools like the FHSA is crucial for anyone looking to buy a house.
How does it operate? Think of it as a hybrid of TFSA and RRSP. Like a TFSA, the FHSA lets your portfolio grow tax-free. For instance, if you're invested in the the S&P 500 fund VFV.TO, any dividends and capital appreciation stay in your pocket. Plus, similar to an RRSP, contributions to an FHSA are tax-deductible, helping you reduce your annual tax bill. It's a practical combination.
Not sure if you're ready for homeownership? No problem. The FHSA can be transferred to an RRSP if buying a house isn't in your immediate future. There's really no good reason not to open an FHSA, but we're open to hearing one if you've got it.
Now, the critical question – what should you invest in with an FHSA? Most investments allowed in a TFSA and RRSP are fair game. Your investment strategy should align with your time horizon for buying a house. If it's just around the corner, consider safe investments or a high-interest savings account. PSA.TO or CASH.TO are solid choices we've discussed before. If you have more time on your side, explore more aggressive investment options like the VFV.TO fund tracking the S&P 500.
In a nutshell, don't miss out on this opportunity. Just opening an FHSA now (even without funding it) will give you a head start with $8,000 before January 1, 2024. Starting the new year, you'll have another $8,000 to contribute. Give yourself the best shot at success – it's worth it."
Comentarios