As housing costs continue to rise, many Canadians, especially young individuals, find it challenging to save enough money for a down payment. Today, Marc Miller, the esteemed Minister of Immigration, Refugees, and Citizenship, announced the accessibility of the innovative tax-free First Home Savings Account. At any rate, it greatly assists Canadians nationwide in achieving their dream of owning a home again.
The First Home Savings Account is a registered savings account designed to assist Canadians in becoming first-time homeowners. Within 15 years, individuals can contribute a maximum of $8,000 per year (with a lifetime cap of $40,000) towards their initial home down payment. Contributions made to the First Home Savings Account are eligible for tax deduction when filing annual income tax returns. Evidently, it is similar to the provisions of a Registered Retirement Savings Plan (RRSP). Withdrawals made from a Tax-Free Savings Account to buy a first home. Along with any investment earnings on the contributions, are exempt from taxes. No taxes upon arrival, no taxes upon departure.
Since April 1, 2023, Canadians have had access to the First Home Savings Account through multiple financial institutions. Presently, it can be availed at seven institutions, with additional ones planning to provide this service shortly.
The objective of the First Home Savings Account is to tackle the issue of housing affordability. Likewise, it is equally essential for the Canadian Government to assist homebuilders in recruiting workforce to commence construction. Nonetheless, a strong focus on streamlining and improving immigration processes.
Increasing the pool of eligible candidates for permanent residence through the Express Entry system. This change expands the inclusion of skilled workers with expertise in homebuilding occupations. On August 3, 2023, a groundbreaking Express Entry draw specifically targeted candidates with trade expertise. This draw welcomed 1,500 individuals in trades occupations, allowing them to apply for permanent residency in Canada. The federal government is taking action to fill gaps in the labor shortage and attract skilled individuals needed to accelerate home construction.