18 Dec

Introducing the First Home Savings Account (FHSA) for First-Time Home Buyers

General

Posted by: Jenni MacDonald

On April 1, 2023, the Canadian government launched a game-changing savings plan – the First Home Savings Account (FHSA) – designed to support first-time home buyers in their journey to homeownership.

A Tax-Deferred Path to Your First Home

The FHSA allows contributions to grow tax-deferred, akin to an RRSP. What sets it apart is the ability to withdraw funds tax-free when purchasing your first home – with no obligation to repay. This contrasts with the RRSP’s Home Buyers’ Plan, where funds used must be repaid within 15 years or be added to your taxable income annually.

Maximize Your Savings Potential

As a prospective homeowner, you can contribute up to $8,000 annually, with a lifetime limit of $40,000. You’ll receive a T4A for your contributions each year, reflecting your tax-deferred growth until you’re ready to buy.

Strategic Contributions for Tax Benefits

Contributions for the year 2023 can be made up until December 31, giving you the advantage of claiming a tax deduction for the year. Continue the momentum with another $8,000 contribution in 2024 to claim on your taxes, all while moving closer to your homeownership goals.

The Advantage of No Repayment

Upon the purchase of your first home, the FHSA serves its purpose, allowing you to close the account without the hassle of repayments or future tax claims – a straightforward path to your first home purchase.

Seamless Transition from RRSPs

Already have funds in an RRSP? Transition them to an FHSA without immediate tax implications, provided it’s a direct transfer within your contribution limits. Remember, these transferred amounts won’t grant you a second tax deduction since they’ve already been claimed.

No Investment Time Restrictions

The FHSA doesn’t bind you with a minimum investment period. However, a 15-year time frame is set from the account opening to utilize the funds for a first-time home purchase, after which the funds can be rolled into an RRSP – all without affecting your RRSP contribution room.

Are You Eligible?

You’re considered a “first-time home buyer” if you haven’t owned a principal residence in the past four calendar years. This opens the door to the FHSA for many aspiring homeowners.

Get Started Today

Interested in the FHSA and how it can accelerate your path to homeownership? Contact me now, and I’ll connect you with a reputable financial institution to begin your journey.

12 Dec

New Year Resolutions for Every Homeowner

General

Posted by: Jenni MacDonald

As 2024 approaches, it’s time to set meaningful New Year resolutions, not just for ourselves but also for our homes. Discover practical ways to enhance your living space and financial well-being in the coming year.

Creating a Balanced Home Budget for 2024

Review or start a home budget to get a grip on your expenses and cash flow. An annual review is crucial to accommodate changes in wages, loan payments, and other expenses. This is also the perfect opportunity to plan for future renovations, vacations, or other significant expenses.

Embracing Minimalism in Your Home

January is the perfect time to declutter and embrace minimalism. Clear out old furniture, clothes, and items that no longer bring you joy. This approach not only frees up space but also helps in bringing clarity and focus to your life.

Reducing Your Home’s Carbon Footprint

Make your home more energy-efficient as a New Year’s resolution. Simple actions like switching off lights, using LED bulbs, and installing energy-saving appliances can significantly reduce your carbon footprint and save you money in the long run.

Cultivating a Home Garden

Whether you have a green thumb or are looking for a new hobby, starting a garden can be both therapeutic and rewarding. You can grow herbs in your kitchen, use pots on the patio, or set up large planters in your backyard.

Enhancing Your Work-From-Home Experience

If you’re still working remotely, make 2024 the year you create a dedicated home office space. This will help in separating your work from your personal life, improving focus, and enhancing productivity.

Optimizing Your Mortgage Renewal in 2024

With many mortgage renewals coming up, start planning ahead. Consider options like debt consolidation, utilizing home equity, or securing a better rate at renewal time.

Maximizing RRSP Contributions Before the Deadline

Remember, February 29, 2024, is the deadline for RRSP contributions for the 2023 tax year. Consider your options between investing in an RRSP or paying down your mortgage and understand how the Home Buyers’ Plan can assist in your first home purchase.

In conclusion, these resolutions are not just about improving your home, but also about enhancing your overall quality of life. Start 2024 on the right foot by implementing these strategies and enjoy a more organized, efficient, and joyful living space.

If you have questions about how a Purchase Plus Improvements Mortgage could work for you or are considering taking this route for your next home, please do not hesitate to reach out to a Dominion Lending Centres mortgage professional for expert advice!