Real Life Benefits to saving for a Home

Tonya Adams - Nov 24, 2023
First Home Savings Account

Like many little girls I grew up playing with dolls, specifically Barbies. Over the years my Barbies lived in a variety of places. Shoe box apartments, plastic playhouses, cardboard refrigerator boxes turned into multilevel mansions. Sometimes Barbie would rough it outside like a settler in the forest in log cabins built with twigs and small branches from the yard.  Wherever she lived, I spent my time, dreaming of the day that I too, would fly the coop of my parents’ house and live in my very own home.

As I got older, my dreams of mansions with slides on the side of the house opening to the pool in the back yard changed to perhaps smaller and simpler but the dream of my very own house remained. Like most people it takes time to make the dream a reality. 

The days you spend dreaming of what you want to live in and searching for the right house that just feels like home. All that time spent is rewarded in the first moment that you unlock the door on the day you close escrow. For most, the time between dreaming of and closing generally means saving, spending wisely and maybe even scrimping. While the result is rewarding it can feel like a chore, even an uphill climb.

Saving doesn’t always feel fun, or rewarding when your long-term goal is years away. But what if you could see the rewards while saving. What if saving for your own home brought you short term rewards?  This year the government introduced the First Home Savings Account (FHSA). It is an investment account which works much like an RRSP in that your yearly contributions to it allows you to claim a deduction on your income tax.

Each year you are allowed to contribute up to $8,000 to a maximum of $40,000.  These contributions allow for income tax deductions in the year they are contributed and can even be carried forward and deducted in a later tax year. Imagine being rewarded yearly for saving for your own home.  The best news is that once you find that “perfect for you” house that will be your first home, you can withdraw the money tax-free. Talk about having your cake and eating it too in your very own kitchen.

I bet you are reading this and saying, “What’s the catch?” well there isn’t one. If you are between the ages of 18 and 71 and have either never owned or haven’t owned your very own house in the last 4 years, you are eligible.  “So, what if I don’t ever find that perfect home”? Well, if after 15 years you still haven’t found home your FHSA can be transferred tax-free to an RRSP or RRIF. 

Being rewarded for saving to make your long term dream a reality, doesn’t get any better than that. Well, finding that perfect little house, with the white picket fence complete with tree shade, and having money set aside to help pay for it, might just be better….

So, if you’re saving for your first home or just thinking about it, perhaps it would be a good time to come in and talk. Conversations are free and the team here at RMFP are always happy to help make those dreams a reality.