The contribution limit will be $40,000 which would last home buyers until 2028 if they allocate the full $8000 in funds per year. The money saved in this new account will grow tax-free until the funds are withdrawn.This new account may increase some short term benefits for potential buyers, but the majority of the advantages will be found in long term planning.
Short Term Benefits
For example, Susan puts $8000 into her First Time Home Buyers Savings Account (FTHBSA) in December. She files her taxes in February and gets an additional $2640 back on her tax return due to the contribution to increase her down payment.
For example, Susan’s parents gift her $43,000 in December to purchase a home. She puts $8000 into her FTHBSA and $35,000 into her RRSP. When she files her taxes, she receives $14,190 back on her tax return to increase her down payment.
Long Term Benefits
This could allow Robert (example above) to carry the deductions forward until he earns a higher income to maximize the tax deductions. This could result in an additional $10,000 to $20,000 in down payment when he purchases a home.
The new savings account is a great advantage for those who will not be purchasing their first home in the next year.
Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.
Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at firstname.lastname@example.org or at 604-802-3983.