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Thread: New Tax free first home savings account (TFFHSA) starts next year

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    Default New Tax free first home savings account (TFFHSA) starts next year

    CBC: https://www.cbc.ca/news/business/bud...sing-1.6412384

    Pretty cool account for those saving for a house.

    • One time use account for down payment saving.

    • 8k contribution per year. up to 40k

    • Tax free like RRSP, Can transfer from RRSP.

    • Can be combine with RRSP HSP plan for additional 35k. But you gotta repay your RRSP.

    • Helps avoid bullshit CMHC fees.
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    Lifetime contribution limit of 40k. Interested to see the details on this. No limit on growth to be withdrawn tax free, or time limit on growth...yet?

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    Devils advocate take

    If people have the liquidity to contribute to this, what benefit does this actually provide versus just using your TFSA contribution room to save and withdrawing to buy a house?

    Is the problem really that people don’t have enough tax sheltered account space to buy a house? Or that they are so taxed into oblivion so much that they couldn’t possible save up a down payment in the first place.

    Once again, more nonsense complexity and administration to mask the real problem.
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    Your point is valid.

    With the amount of parents gifting a down payment, this benefits the parents big time. Gift 8k each year in kids name, get the tax deduction on the deposit, have it grow tax fee and buys the kid a house with a large tax free down payment

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    Quote Originally Posted by killramos View Post
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    Devils advocate take

    If people have the liquidity to contribute to this, what benefit does this actually provide versus just using your TFSA contribution room to save and withdrawing to buy a house?

    Is the problem really that people donít have enough tax sheltered account space to buy a house? Or that they are so taxed into oblivion so much that they couldnít possible save up a down payment in the first place.

    Once again, more nonsense complexity and administration to mask the real problem.
    If I'm saving for a house I now have $14K per year in contribution room in tax free accounts. I don't think it's the taxes on the gains of the second $8K that is the make or break of anyone buying a home but man it sure is good vote-grabbing isn't it? On the other hand, why should someone get $8K per year of tax free contribution / investing that I don't get just because I bought my house already? The simple solution here was just to bump the TFSA limit to $10K - $14K per year so it was fair to everyone.
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    ^^the TFSA option is not good optics for the people complaining about housing costs #politicalstuff

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    Quote Originally Posted by Masked Bandit View Post
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    If I'm saving for a house I now have $14K per year in contribution room in tax free accounts. I don't think it's the taxes on the gains of the second $8K that is the make or break of anyone buying a home but man it sure is good vote-grabbing isn't it? On the other hand, why should someone get $8K per year of tax free contribution / investing that I don't get just because I bought my house already? The simple solution here was just to bump the TFSA limit to $10K - $14K per year so it was fair to everyone.
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    Pretty dumb virtue signaling. Helps no buyers in the short term. The small amount of capital gains paid on the interest from this is negligible in the current housing market. Cool your 40k became 50k? 10k gains, 50% of that is 5k, 33% tax of that is 1300$. So over 5 years of contributing and then however long to gain 20% you saved 1300$. In a market where houses go up 10k a month.

    I'd be curious how many first time home buyers actually have their TFSA maxed out to begin with. Seems like you'd still fill your TFSA first since it's unrestricted. Though arcticcat has a good point, guess this works well for mommy and daddy buying their kids a future house.
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    Exactly my point. Just more dumb taxation systems that help no one but the government administration that needs to be in place to support them.
    Originally posted by Thales of Miletus

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    Quote Originally Posted by killramos View Post
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    Devils advocate take

    If people have the liquidity to contribute to this, what benefit does this actually provide versus just using your TFSA contribution room to save and withdrawing to buy a house?

    Is the problem really that people don’t have enough tax sheltered account space to buy a house? Or that they are so taxed into oblivion so much that they couldn’t possible save up a down payment in the first place.

    Once again, more nonsense complexity and administration to mask the real problem.
    Contributions to a TFSA are not deductible for income tax purposes.

    This gets taken off your income like RRSP.

    So if you put 8k into this account. you also get a ~1-3k tax break (depending on your income). Pretty big deal IMO.

    But I do agree. Long term what we need is more housing; housing demand is fairly inelastic, we need more supply.
    Tax breaks for builders, relaxation of zoning, encourage more multi-unit buildings, ban foreign owners.
    Last edited by jacky4566; 04-16-2022 at 04:20 PM.
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    haha, Canadians are so dumb to fall for shit like this.

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    I couldn't tell from the current info but if this new TFFHSA is like HBP in the sense that I can use the program again (4 yr rule, paid back RRSP, etc.), it helps current homeowners too!

    Although it would make sense if this is only for people who don't own a home at all yet.

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    Yea only for first time buyers. No payback required.
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    Quote Originally Posted by jacky4566 View Post
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    Yea only for first time buyers. No payback required.
    Who said it's for first time buyers only?

    The HBP is technically catered to first time buyers as well and it is able to be used over and over as long as you meet the criteria.

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    Do you think I can use it as a first time camper owner with 25 year financing?

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    Canadians: "Houses are unaffordable!"

    Gov't of Canada: "Inject more liquidity!"

    Fucking Canadians are retarded.

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    I wonder how much the extra government bureaucracy costs the average person who uses this for the 1-3k of tax savings this provides.

    To echo buster… Canadians are retarded.
    Originally posted by Thales of Miletus

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    guessing who I might be, psychologizing me with your non existent degree.

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    Torontistan eats this shit up and keeps voting for sock boy.

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    Maybe in the future all non homeowners can afford is 500k downtown condos... cough..

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    Of all the many economic and tax problems canada is facing, this solves zero of them. Nice work.
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