Have you opened up your First Home Savings Account (FHSA) yet? If you have, you’re in the minority. Most financial institutions say they aren’t prepared to offer the product, despite the official April 1st launch date.
What’s new: The country’s big six banks are all working on different timelines—Scotiabank said it would offer the FHSA “soon,” RBC was vaguer announcing “spring,” and the National Bank of Canada said, “as quickly as possible.”
- TD, CIBC and BMO said the account will be offered in time for the 2023 “tax year,” which could mean in 2024.
- Questrade is currently the only financial institution offering the FHSA.
Why it’s happening: Financial institutions are pointing fingers at the Canada Revenue Agency (CRA), saying they are waiting for government authorizations and tax reporting guidelines.
- In a statement about the delayed rollout, Desjardins said setting up savings accounts with tax implications requires coordination with the CRA to ensure client eligibility.
Yes, but: The CRA says it has handed over all the necessary information financial institutions need to provide the FHSA to Canadians.
Why it matters: Canada’s future homeowners have been eagerly awaiting the launch of the new tax-sheltered account with a cap of $40,000 and annual contribution room of $8,000.
- While the delayed rollout won’t impact the contribution room for 2023, savers who plan on investing through their FHSA could lose out on potential non-taxable gains.
Bottom line: Even if you’re unsure that home ownership is right for you, it’s still a good idea to funnel some money into an FHSA when they become available—if you don’t use it to buy a home you can always transfer the balance to a Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF.)