So far we have learned what exactly a First Home Savings Account (FHSA) is and how it helps buyers get a head start on saving before they start searching for houses for sale in Windsor. We also covered how to open an FHSA and how to make a withdrawal from your FHSA. How do you grow your FHSA though? We’ll cover participating in your FHSA in this post.
In order to participate in your FHSA, you can either transfer from an RRSP or contribute directly to your FHSA. You have both an annual participation room as well as a lifetime participation room. Your FHSA participation room in the year that you open your first FHSA is $8,000, while your lifetime FHSA limit is $40,000. Any and all contributions and transfers you make to your FHSAs will reduce your remaining lifetime FHSA limit. Remember, if your contributions and transfers exceed your participation room for the year, you will have an excess FHSA amount and are subject to tax penalties.
If you recall, you can open more than one FHSA. These limits are all encompassing over all of your accounts, not per account. Essentially, you cannot contribute $8000 annually into each account, you can only contribute $8000 annually in total over all accounts. The same limitation applies to the lifetime limits.
What happens if you do not use all of your participation room in a year? You are allowed to carry forward your unused FHSA participation room at the end of the year. You can carry over a maximum of $8,000 to use in the following year. The CRA will classify this as your FHSA carryforward and will include it in the calculation of your FHSA participation room for the year.
Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, LaSalle, Harrow, Chatham, and Leamington, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!