The federal government wants a tax-free housing savings account that would be offered to potential first-time home buyers to be rolled out next year.
As part of the federal government’s housing commitments in the 2022 budget, which was released on April 7, it was proposed that the Tax-Free Home Savings Account be created.
The bank account would give potential first-time home buyers the opportunity to save up to $40,000.
As with a Registered Retirement Savings Plan (RRSP), contributions to the First Home Tax-Free Savings Account would be tax deductible.
In addition, withdrawals from the account to buy a first home – including investment income – would be tax-free, just like a regular tax-free savings account (TFSA).
The federal government has said it plans to work with financial institutions to ensure that a first tax-free home savings account can be opened and contributed by Canadians starting in 2023.
It is estimated that the first tax-free home savings account would provide support of $725 million over five years.
In a tweet about the new federal budgetJustin Trudeau said his government is investing in housing, making the housing market fairer and helping young people save for their first home.
Minister of Finance and Deputy Prime Minister Chrystia Freeland tweeted“We need affordable housing for all and investments that ensure an entire generation is not deprived of the cost of owning a home.”
Budget 2022 also proposed other supports for first-time homebuyers, including doubling the First-Time Home Buyers’ Tax Credit and extending the Home Buyer Incentive. first property.
According to statistics from the Canadian Real Estate Association, the average national house price in Canada was a record high of $816,720 in February 2022, a difference of more than 20% compared to the same month in 2021.
Canada’s national average price is “heavily influenced” by sales in Greater Vancouver and the Greater Toronto Area.