5 Points Group - April Newsletter

We hope that you avoided getting pranked at the start of this month! (if you did, we don't blame you!) This month, we have a few new listings to share with you! We would love to see you at a showing or an open house! This past week was the Keller Williams Awards Gala and our Sales Representatives took home some awards! We have some pictures to share with you from that event. (gotta show off the bling, after all!) We will round out this month's newsletter with some wise words regarding the new first time home buyers savings account from our mortgage expert, Drew!

NEW LISTINGS

Our Team Won Some Awards!

Drew Hermiston's Mortgage Corner

On April 1^st, 2023 the Canadian government will be rolling out a new savings program to help First Time Homebuyers save for a down payment. This program allows individuals to save $40,000 on a tax-free basis. Here is the First Home Savings Account Explained.

Prior to April 1^st 2023 the two main vehicles used by  first time homebuyers to save for a down payment were through either a TFSA (Tax Free Savings Account) or RRSP (Registered Retirement Savings Program). Each has their own pros and cons associated with these accounts. The new First Home Savings Account will essentially combine the key attributes of a TFSA and RRSP into one account.
 

The benefit of saving through an RRSP account for the purposes of a down payment is that you are able to take advantage of tax deductions from  your contributions allowing you to pay less income tax. Through the current Canadian Home Buyers plan you are able to withdraw up to $35,000 tax-free from your RRSP. The disadvantages of this plan for the purpose of a down payment are that you  have to repay whatever you withdrew from your RRSP within 15 years of withdrawal.

The benefit of saving through a TFSA for the purposes of a down payment is that you are able to withdraw funds completely tax-free, without having to deposit funds back into the account like the RRSP through the Home Buyers Plan. The disadvantage to this account is that you are unable to receive tax deductions for any contributions you make to this account.

This is where this new FHSA program comes in. This account allows you to save up to $40,000 on a tax-free basis. Through this account you are able to have the benefits of tax deductions similar to the RRSP, with the ability to withdraw the funds for purpose of purchasing your first home tax-free like a TFSA. You are also not required to replace the withdrawn funds within any timeframe.

All in all, if you are saving money for the purposes of a down payment on your first home the FHSA is definitely something Canadians should be taking advantage of.