TAX-FREE FIRST HOME SAVINGS ACCOUNT- DRAFT REGULATIONS RELEASED
The federal Department of Finance has released legislative proposals to introduce a Tax-Free First Home Savings Account (FHSA to give prospective first-time home buyers the ability to save $40,000 on a tax-free basis commencing next year.
The draft regulations confirm that any financial institution (FI) that issues RRSPs and TFSAs would be able to issue FHSAs, and that FHSAs will be permitted to hold the same qualified investments that are currently allowed to be held in a TFSA. While taxpayers will generally be responsible for ensuring they do not exceed their contribution limit in a given year, FIs will be required to send CRA annual information returns in respect of each FHSA that they administer.
The IIAC is currently reviewing the draft regulations with members.
Additional information is provided in Finance Canada’s backgrounder. You may also contact Jack Rando.