The rules

House prices are falling in the country’s biggest market. The government had nothing to do with that, of course. And things will unwind further after Wednesday’s bomb from the Bank of Canada.

In a moment, we’ll review the rules for that weird TFSA-RRSP hybrid home-buying tax shelter called the FHSA, announced formally in Thursday’s budget. First, some realities.

You remember how this pathetic blog has been ragging on you for weeks now (or is it months?) to (a) not buy and (b) sell if you’ve been contemplating it? Well, hopefully some listened. Every day that passes the buying will get easier as prices fall and listings accumulate while the selling will be more difficult, with reduced showings, fewer offers and way less froth. As the central bank raises its key rate a half-point this week and five-year mortgages head for the 5% mark this summer, conditions will change further. No wonder, given the fact Canadian real estate has just bounced off a towering wall of unaffordability.

Look at this chart of sale (not listing) prices for single-family homes in the mighty GTA so far in 2022:

Source: Realosophy, John Pasalis (who hates me)

You can see the drift. As confirmed by the most recent real estate board stats, detacheds are 7% cheaper than they were a few weeks ago. It means the kids who bought in February paid $150,000 more than they would today. And the newbies buying in June will be forking out a smaller amount than purchasers in April. Yes, the loan rate will be higher but the debt lower. God likes that.

Now, what about the Tax-Free First Home Savings Account?

You will recall it was unveiled during the totally unnecessary 2021 federal election campaign which ended up giving us a Trudeau-Singh coalition administration. At that time the FHSA was earmarked only for people under 40, proving once again that ageism is perfectly fine for all the woke people who hate every other ‘ism.’

That’s gone now. Saner heads prevailed. The FHSA is open to anybody meeting these criteria:

  • Over 18
  • Canadian resident (you do not need to be a citizen or a PR)
  • Don’t currently own a home, and
  • Have not owned one at any time in the previous four calendar years (so when the accounts are available next year that will mean no real estate held since 2018)

And how does this thing work?

Contributions to the FHSA are deductible from taxable income in the year they’re made, just like an RRSP. To that extent (like retirement plans) they favour people in higher-income brackets who can score a bigger tax refund. The money inside the FHSA can be invested in almost any financial asset (like other shelters) and all growth is untaxed – as with an RRSP.

The key feature is funds can be taken out of the plan free of tax (like an TFSA) even though contributors received a tax credit for putting them in. So taxpayers in general will subsidize those using a FHSA to buy an asset (real estate) which can grow in value over time and yield a tax-free capital gain. No, it’s not fair and renters should be pissed. But wait…

The annual contribution limit is $8,000 – or 30% more than you can put into a TFSA (also unfair) – but there’s a lifetime limit of $40,000. The FHSA is also a use-it-or-lose-it thing since unused contribution room doesn’t accumulate, and expires after 15 years. If the money hasn’t been used to buy a house by then, the account must be closed (but you walk away with 15 years of untaxed compound growth of assets and the tax reduction for having put $40,000 in over that time. Sweet.).

First-time homebuyers should note if they use a FHSA to make a down payment then cannot also utilize the RRSP Homebuyer’s Plan (which allows a couple to access $70,000 in retirement plan assets, then take 15 years to repay it). Also worth knowing is that money can be transferred from an existing RRSP into a FHSA as a ‘contribution in kind’. This is completely weird, since you get a tax break for putting money into the RRSP, collect another one when the funds are transferred to the FHSA, then the dough can be taken out to buy real estate with no tax. Wahoo.

So the FHSA is a fabulous tool for high-income renters who want an extra tax shelter allowing 15 years of aggressive ETF-based taxless growth, tax-free withdrawals, the ability to double up on tax deductions and significantly higher annual contribution limits. But for young first-time buyers, it’s a nothingburger. Most will opt for safe, interest-bearing assets inside the account since they cannot risk volatility with down payment money and it’s unlikely to pace even the most modest annual real estate appreciation.

So, we’ll just let Mr. Market do his thing.

About the picture: “Hello Garth, this is our dog Banjo enjoying a cool fall day in Manitoba’s beautiful Nopiming Provincial Park,” writes Lisa. “Thanks to your guidance over the years there’s no more dealing with [email protected], as I confidently manage our B + D portfolio myself. Because financial security = more time to spend with your people and your dog.”

148 comments ↓

#1 Wozzy13 on 04.10.22 at 12:30 pm

The libs have been pushing housing price higher I’m not so sure they will let them fall the dollar is rapidly losing ppower will higher rates put a brake on this I’m not sure of that either….

#2 T Rex and the dinosaur clique on 04.10.22 at 12:34 pm

Re: BOC will raise interest rates this wednesday…

Maybe.

Or Tiff could drop a woke bomb and hold rates where they are, citing the need to focus on the climate, the virus and pressing social justice issues and reminding everyone that the role of a central bank in a woke country is not primarily monetary policy, but rather a dedication to the great reset, the new normal and woke social justice.

What’s everyone’s bet on this?

Place your best?

Woke socialism versus sound economic policy.

#3 Overheardyou on 04.10.22 at 12:40 pm

For a married couple, if one owned a home in the last 4 years does the couple disqualify until the 4 years is up?
Thank you in advance

#4 Cheese on 04.10.22 at 12:43 pm

Already pay virtually no tax due to low income, this does not appear to be useful to those who already will never afford a house.

The tax free growth, and larger than the TFSA is fantastic though (though why not just make the TFSA 12k/yr?), glad they removed the age limit as I turned 40 this year.

#5 Ballingsford on 04.10.22 at 12:45 pm

Also worth knowing is that money can be transferred from an existing RRSP into a FHSA as a ‘contribution in kind’. This is completely weird, since you get a tax break for putting money into the RRSP, collect another one when the funds are transferred to the FHSA.

*****

Wierd all right. Can you only transfer up to $8000/yr, or the whole $40,000 in one shot?
If $8,000 transfer/yr, so I get the tax break on the 8000 I put into the RRSP and then get another 8000 break on the same 8000? Like double dipping or whatever that would be called.

#6 Richard L on 04.10.22 at 12:54 pm

Thank you Garth this is a very informative post. We will be taking advantage of this new tax shelter.

#7 In the cold on 04.10.22 at 12:57 pm

Can one use money from the new RRSP/TFSA thingy to buy a house outside of Canada (let’s assume their first house)?

#8 Mel Bourne on 04.10.22 at 12:58 pm

If I put the house in my spouse’s name, can I open a FHSA account? Put $8,000 per year to a max of $40,000 into it and withdraw the money in 15 years tax free?

Just play by the rules. Sheesh. – Garth

#9 crowdedelevatorfartz on 04.10.22 at 1:00 pm

“So the FHSA is a fabulous tool for high-income renters who want an extra tax shelter allowing 15 years of aggressive ETF-based taxless growth, tax-free withdrawals, the ability to double up on tax deductions and significantly higher annual contribution limits. ”

+++

Wow!
Thanks Trudeau.
For making us Boomer renters richer than we already are
Bwahahahahahahahaaha,

#10 Nothing burger on 04.10.22 at 1:01 pm

“ Most will opt for safe, interest-bearing assets inside the account since they cannot risk volatility with down payment money and it’s unlikely to pace even the most modest annual real estate appreciation.”

Is that the way to go or should they be more growth oriented investments?

#11 Sail Away on 04.10.22 at 1:02 pm

Thanks Garth!

Two other notes about the THSA:

1. If not used, accumulated cash can be transferred to RRSP without affecting RRSP room
2. Nowhere does it stipulate THSA can only be used for Canadian RE

https://budget.gc.ca/2022/report-rapport/tm-mf-en.html

#12 Reality is stark on 04.10.22 at 1:07 pm

Closing.
Funny how lousy buyers feel when they bid $400,000 over asking come closing day. Guess what happens next?
You really think they are going to pony up the cash?
After all you just bragged to all your friends that you just hit the top of the top.
This is when everyone realizes that 400,000 is a lot of money. The couple that bought first and just sold for asking now needs a second mortgage for the $400,000 that wasn’t in the original budget.
So where does the social justice victimhood no personal responsibility modern society rear it’s ugly head?
Right here where the rubber meets the road.
Since you are an evil capitalist they tell the judge they made an emotional decision which they are never accountable for compelling the judge to get you to alter your price.
Good luck getting your money.
The social justice warriors are big time strong and take full credit when the market goes up, when it turns they are absolved of any responsibility.

#13 crowdedelevatorfartz on 04.10.22 at 1:09 pm

@#63 A quintillian degrees of perfection
“Beneath the fairly innocuous thin veneer; there is a more sinister and putrid thick layer of greed, xenophobia, sardonic and misanthropic bent.
“”

As opposed to the thick layer of Woke ,victim wallowing, ageism, greed, misandry and politically correct self denial?

I guess all the tax benefits are only for the 40 year old and younger, cocooning, basement dwelling, CERB-ians?

Gotcha.

#14 Victor Rajkotwala on 04.10.22 at 1:16 pm

If you own a house jointly with your spouse, is either one eligible for the FHSA?

If you own a house, neither. – Garth

#15 Prince Polo on 04.10.22 at 1:18 pm

Any word on penalty for slamming $40K into the FHSA in the first year?

Likely the same as RRSP/TFSA overcontributions. – Garth

#16 North snore on 04.10.22 at 1:21 pm

Canadian resident (you do not need to be a citizen or a PR)

How can you be a resident without being a pr or a citizen? Can someone explain it please

#17 Linda on 04.10.22 at 1:21 pm

‘Banjo’ is one handsome pup. Also has great camouflage coloration!

So the FHSA/RRSP contribution in kind angle. Talk about your double dipping, getting to claim the same $ twice if you meet the criteria for opening a FHSA. Plus if you don’t buy RE within the 15 year timeframe you can then roll the dollars back into your RRSP. This is manna from heaven for those who 1) don’t currently own RE; 2) have maxed out their RRSP contribution room; 3) are still working. Talk about the gift that keeps on giving!

#18 Jens on 04.10.22 at 1:27 pm

Correct me it I am wrong, but as long as you make enough money to pay any income tax at all, the FHSA is not a nothingburger, even if its assets were not to grow at all. It will at least allow you to pay down up to $40,000 from before-tax income, giving you a nice tax break.
Besides, in a climate of a coming potential long and steady decline or stagnation of housing prices, even the most boring investments will outpace that.

#19 Stone on 04.10.22 at 1:29 pm

The annual contribution limit is $8,000 – or 30% more than you can put into a TFSA (also unfair) – but there’s a lifetime limit of $40,000. The FHSA is also a use-it-or-lose-it thing since unused contribution room doesn’t accumulate, and expires after 15 years. If the money hasn’t been used to buy a house by then, the account must be closed (but you walk away with 15 years of untaxed compound growth of assets and the tax reduction for having put $40,000 in over that time. Sweet.).

———

So, do you pay tax on the FHSA if you don’t buy a house and the 15 year period expires and you have to withdraw your funds from it?

#20 Flop… on 04.10.22 at 1:37 pm

FHSA.

Yeah, 40k in Vancouver real estate can get you half of a parking spot.

With my current vehicle going’s on I will probably tweak it over the next 15 years and use as it a FSHA Fund.

Flop’s Second Hand Automobile…

M47BC

#21 I don’t know on 04.10.22 at 1:47 pm

“ As confirmed by the most recent real estate board stats, detacheds are 7% cheaper than they were a few weeks ago. It means the kids who bought in February paid $150,000 more than they would today.”

Real estate is local. Not all markets are down.

People buy for a number of reasons, notably to raise a family, lay down roots, have stability, and that renting isn’t a great alternative for most.

Many of those “kids” bought to raise families.

If they bought last month, and locked in for five years, month/month changes mean zero. If they plan on living there for even longer (or forever) it means less than zero.

Although it’s a good wager that house prices will be higher in five years.

If a speculator bought and planned on flipping next month, being at the mercy of month over month changes is part of the game.

You buy real estate (preferably with dirt) when you can afford to, not when your crystal ball says to.

IDK

#22 Millmech on 04.10.22 at 1:51 pm

Garth,
If one uses the RRSP to purchase a home would the FHSA still be allowed to carry forward for the 15 years or would it be deemed to be collapsed upon the possession date?
Thank You!

#23 Blobby on 04.10.22 at 1:55 pm

As a 41 year old with no intention of buying a house, the tax shelter sounds amazing.

Surely the age limit is discriminatory somehow? How is the “inclusion” and “anti discrimination” party allowed to get away with that?

#24 Tom Grozny on 04.10.22 at 2:01 pm

Do taxes need to be paid when withdrawing from/closing FHSA?

#25 david on 04.10.22 at 2:03 pm

#16 North snore
=> if you are a student or on a working VISA and spend at least half of the year in Canada you are a resident.
You can be Canadian and not a resident if you live abroad.

#17 Linda
=> Indeed it is perfect for high income workers/savers.

#26 Danger Dan on 04.10.22 at 2:04 pm

Verily, we shall shelter like the peasants of a seaside village fleeing the Vikings.

#27 AM in MN on 04.10.22 at 2:13 pm

#2 T Rex and the dinosaur clique on 04.10.22 at 12:34 pm
Re: BOC will raise interest rates this wednesday…

Maybe.

Or Tiff could drop a woke bomb and hold rates where they are, citing the need to focus on the climate, the virus and pressing social justice issues and reminding everyone that the role of a central bank in a woke country is not primarily monetary policy, but rather a dedication to the great reset, the new normal and woke social justice.

What’s everyone’s bet on this?

Place your best?

Woke socialism versus sound economic policy.

———————————————————

So True!

While I’m inclined to go with woke socialism driving this BoC regime, no one is ever immune to public sentiment.

Poilievre has been one of the few speaking out about the menace of BoC money printing, and although it’s a long way to the Leadership vote (which he’ll take on the first ballot), he’s packing them in like no other politician in the country.

This week it was several thousand each in places like East Vancouver, Kelowna, Prince George… and includes a big chuck of young people who have figured out he scam that the banking elites have been running.

First they’ll try to ignore it, but like with Trump it’s just too hard to ignore when thousands keep showing up to hear a message.

Next they (CBC, Toronto media) try to downplay it or dismiss it, but as interest rates go up and prices of everything go up, it gets to hard to ignore.

A phase if denial will become the narrative, inflation and price increases really aren’t as bad as you think…, but that won’t sell well, so lastly they might try some interest rate hikes and balance sheet reduction.

That will lead to asset price crashes and ballooning govt. deficits due to interest payments.

Pick your poison, at some point reality strikes.

They question then becomes, does the NDP try to abandon the sinking ship and let the non-finance Finance Minister become the 2nd Kim Campbell?

#28 Dr V on 04.10.22 at 2:14 pm

“Also worth knowing is that money can be transferred from an existing RRSP into a FHSA as a ‘contribution in kind’. This is completely weird, since you get a tax break for putting money into the RRSP, collect another one when the funds are transferred to the FHSA…” – Garth
——————————————————

This does seem completely weird, or am I just reading it
wrong?

An “In kind contribution” into a registered account is
normally a taxable event. So in the case of the RRSP IKC to FHSA, tax would be owed as if the money is
withdrawn from the RRSP, then the FHSA contribution
amount would result in an equivalent tax reduction
giving a net zero tax on the transaction. For this type of transfer it appears they just skip those steps.

#29 jimmy zhao on 04.10.22 at 2:18 pm

I look forward to gaming the FHSA before the rules are tightened up. Especially the ability to melt down your RRSP by transferring assets into the FHSA in kind.

#30 Lee on 04.10.22 at 2:20 pm

So people with no intention of buying a house can invest $40,000 over 5 years, get $15,000 in refunds, and walk away with tax free growth after 10 more years? Does the $8,000 reduce one’s yearly RRSP contribution limit or tax refund max?

#31 Dogman01 on 04.10.22 at 2:21 pm

#2 T Rex and the dinosaur clique on 04.10.22 at 12:34 pm

Message from your future:
I am still awaiting my ESG score so I can finalize my taxes, fortunately I got it high enough this year to restore both my Library card and my travel privileges. I earned over 90 points by watching 1000+ hours of verified non-disinformation CBC content and an additional 30 points as my banking data showed I was buying only buying certified vegan cricket burgers. For the CBC content the trick is to use mouse movers as once you have registered for your ESG points you need to allow access to all your internet activity. Unfortunately my VPN was detected and I almost had my bank account frozen – that anti encryption law is pretty serious stuff, but there is no way anyone could watch CBC that much and still retain santity…

#32 Phylis on 04.10.22 at 2:27 pm

How do they stop spouses that are not on title from opening an account?

#33 Wile E. Coyote on 04.10.22 at 2:31 pm

Read https://budget.gc.ca/2022/report-rapport/tm-mf-en.html

I’m not sure on the income qualification aspect. For example a retired couple that rents, doesn’t have a pension and lives off the dividends. It looks like they would still qualify for the account.

So is this not, at a minimum, a way for a high net worth renting couple to withdraw $40,000 each from the RRSP tax free?

#34 THE DANDADA on 04.10.22 at 2:44 pm

I’m getting tired of all these TLA’s and FLA’s….

you know – 3 letter and 4 letter acronyms.

#35 Bezengy on 04.10.22 at 2:55 pm

How many more government workers will be needed to track and manage all of these schemes? Quick answer is more than the forty two thousand they already have working at the CRA.

#36 Dr V on 04.10.22 at 3:03 pm

So many questions…….everyone just needs to wait.

From the link provided by sailo and Wile E

“Budget 2022 proposes to create the Tax-Free First Home Savings Account…….. The government will release its proposals for other design elements in the near future.”

Nothing takes effect until 2023. Lots of time to plug the
loopholes.

But there has not been any RE with my name on it for 20 years. I have an RRSP. 15 years? Hmmmmm…….

#37 Taxman on 04.10.22 at 3:09 pm

“ since you get a tax break for putting money into the RRSP, collect another one when the funds are transferred to the FHSA, then the dough can be taken out to buy real estate with no tax. Wahoo.”

That’s not true…

#38 IHCTD9 on 04.10.22 at 3:16 pm

#9 crowdedelevatorfartz on 04.10.22 at 1:00 pm
“So the FHSA is a fabulous tool for high-income renters who want an extra tax shelter allowing 15 years of aggressive ETF-based taxless growth, tax-free withdrawals, the ability to double up on tax deductions and significantly higher annual contribution limits. ”

+++

Wow!
Thanks Trudeau.
For making us Boomer renters richer than we already are
Bwahahahahahahahaaha,
————

It’s amazing to me how some kids still think Trudeau is “working hard” for young Canadians. He keeps doing stuff like this over and over and over, and they still vote him back in.

Maybe he felt all the X/Boomers who own houses have received enough, so now it’s time to stuff the bank accounts of well off renters as well?

LOL!

#39 Proud CERBian on 04.10.22 at 3:19 pm

This is just one of the new measures that will hold our proud nation together.

We are here now and forever in our new collective land.

All Hail CERBia!

#40 Steel City Kid on 04.10.22 at 3:22 pm

Wow! Now that this tax shelter is open to the over forty-set, my ears are up! Another question to add to the growing list — can each eligible member of a spousal unit contribute to their own FHSA, racking up a total between them of 80K in tax-sheltered investment?? Thanks for this illuminating post, Garth.

#41 Quintilian on 04.10.22 at 3:22 pm

Not surprised oh how the irony is lost here.

The ink has not yet dried , and the human saprophytes have their saliva glands on max power to gorge on morsels handed out by the government they hate.

#42 IHCTD9 on 04.10.22 at 3:26 pm

#33 Wile E. Coyote on 04.10.22 at 2:31 pm

So is this not, at a minimum, a way for a high net worth renting couple to withdraw $40,000 each from the RRSP tax free?
—- –

Think of the possibilities. Take 8K out of your RRSP’s triggering income taxes. Open a FHSA and take another 8K out of your RRSP’s and get those taxes back. Now, you’ve just moved 32K out of you+spouses RRSP’s – tax free in one year. 5 years later it’s 160K.

Makes me want to sell my house!

#43 Joseph R. on 04.10.22 at 3:35 pm

#19 Stone on 04.10.22 at 1:29 pm
The annual contribution limit is $8,000 – or 30% more than you can put into a TFSA (also unfair) – but there’s a lifetime limit of $40,000. The FHSA is also a use-it-or-lose-it thing since unused contribution room doesn’t accumulate, and expires after 15 years. If the money hasn’t been used to buy a house by then, the account must be closed (but you walk away with 15 years of untaxed compound growth of assets and the tax reduction for having put $40,000 in over that time. Sweet.).

———

So, do you pay tax on the FHSA if you don’t buy a house and the 15 year period expires and your funds from it?

———————————————————

Yes, you have to close the account. However, there seem to be a contradiction on the website: https://budget.gc.ca/2022/report-rapport/tm-mf-en.html#a2_1

At first, it states all withdrawals not done to purchase a first house is taxable:

Withdrawals and Transfers

Amounts withdrawn to make a qualifying first home purchase would not be subject to tax. Amounts that are withdrawn for other purposes would be taxable.

However, further down it states:

If an individual has not used the funds in their FHSA for a qualifying first home purchase within 15 years of first opening an FHSA, their FHSA would have to be closed. Any unused savings could be transferred into an RRSP or RRIF, or would otherwise have to be withdrawn on a taxable basis.

You can transfer the funds to a RRSP, in-kind, without paying taxes, if you have enough RRSP contribution room

#44 baloney Sandwitch on 04.10.22 at 3:36 pm

Why is this not discrimination against property owners?

#45 Søren Angst on 04.10.22 at 3:44 pm

Ageism.

SO true.

Rates up. Prices down.

Always has been and always will be except for a few Commenters on this Blog that do not understand Econ 001 or are vanilla Cdn RE diseased fanatics.

———————–

Elon, but a few days shareholder of Twitter conducts a Twitter poll with this question:

Convert Twitter SF HQ to homeless shelter since no one shows up anyway

https://twitter.com/elonmusk/status/1512966135423066116

and

Delete the w in twitter?

https://twitter.com/elonmusk/status/1513045405029711878
[rigged as the selections were “Yes” or “Of course”]

My suggestion was delete the “ter” instead but I like his verve.

What a guy!

#46 Ponzius Pilatus on 04.10.22 at 3:47 pm

#11 Sail Away on 04.10.22 at 1:02 pm
Thanks Garth!

Two other notes about the THSA:

1. If not used, accumulated cash can be transferred to RRSP without affecting RRSP room
2. Nowhere does it stipulate THSA can only be used for Canadian RE

https://budget.gc.ca/2022/report-rapport/tm-mf-en.html
—————
Thank you, Sailo
Gonna E-mail my NDP MP right away.
Lets close this loophole.

#47 Still Employed in AB on 04.10.22 at 3:53 pm

Does this mean I can put money in a spousal RRSP and then my other half can transfer it to her FHSA for tax free growth if I stop contributions for 90 days.

#48 Søren Angst on 04.10.22 at 3:56 pm

Les wow in France.

1st Round President election results (projections, 3 hr ago):

Macron 28.4% of the vote,
Le Pen 23.4% and
Jean-Luc Mélenchon 21.1%.

https://www.france24.com/en/france/20220410-live-follow-the-results-of-the-first-round-of-france-s-presidential-election

Live as I type:

https://www.youtube.com/watch?v=tXJx9ifH2hk

Macron a Left/Right Progressive
Le Pen a Far Right Nationalist – too close for comfort
Mélenchon your garden variety Commie.

Vive La France!

#49 Concerned Citizen on 04.10.22 at 4:12 pm

The FHSA will do nothing to improve home affordability. As you say, all it will do is help upper middle class and high income renters that already exhaust their RRSP and TFSA room. At least they got rid of the age 40 cap, but it’s just a dumb account in the first place. I expect the Conservatives will get rid of it next time they form government, and rightly so.

The problem is one of affordability. The problem is not a lack of vehicles in which to save. They surely know this, and yet they proceeded with this policy anyways. Disappointing, and predictable.

#50 Philco on 04.10.22 at 4:17 pm

#31 Dogman01 on 04.10.22 at 2:21 pm

Yup
T2=danger

#51 ElGatoNeroYVR on 04.10.22 at 4:25 pm

#31 Dogman01 on 04.10.22 at 2:21 pm
Funny but unfortunately very true if the socialists /woke have it their way.
If one doesn’t believe it just google China social score and realize that you simply cannot function there without WeChat and the social score determines your lot in life.
People are being banned from jobs, travel ,house purchases based on their social score.
It is bad enought that the woke movement has pushed things basically to the point we used to live like in the Eastern block , afraid to openly state an opinion for fear of being cancelled , not getting a job or a promotion unless you belong to a specific group ,a.s.o. . The danger is real and we are not making yet enough strides towards restoring a truly free speach and open society.

#52 D.D. Corkum on 04.10.22 at 4:38 pm

#2 T Rex on 04.10.22 at 12:34 pm

“Place your bets”

25, if only to appear calm despite forecasts (calls?) for 50.

#53 rampant inflation on 04.10.22 at 4:44 pm

#2 T Rex and the dinosaur clique on 04.10.22 at 12:34 pm

Re: BOC will raise interest rates this wednesday…

Maybe.
________________________________

rates are going up 50 bpts next week, and for each meeting after until rates get to 3% by year end.

short rates will get to 3.50-4% in 2023 some time.

you can bet on that

#54 Albertaguy in AB on 04.10.22 at 4:46 pm

I am sure there will be a dozen ways to game this new tax shelter by those with no intention of ever buying a home, or even by those that already own one or more. Would it not have been more simple to just increase the TFSA limit for everyone? The costs to administer and audit this this will be stunning. Wasn’t it T2 who reduced TFSA from 10k the limit because.. “because no-one has that kind of cash lying around…” apparently now the only ones that do are the poor renting 1st time home buyers. Yeah right.

#55 Comrade on 04.10.22 at 4:48 pm

Interesting re GTA, would be interesting to know the background behind the data as it doesn’t seem to match whats happening on the ground.

In Vancouver, seems most of listings get snatched within a week, and go 10 to 15% over asking price. Based on a few listings that I have followed. (just recently saw two 3bdr townhomes in port moody listed for 1.2Mil, sold for 1.45mill within 5 days)

#56 Ponzius Pilatus on 04.10.22 at 5:13 pm

#35 Bezengy on 04.10.22 at 2:55 pm
How many more government workers will be needed to track and manage all of these schemes? Quick answer is more than the forty two thousand they already have working at the CRA.
 —————–
Works out to 1 worker per 1,000 Canadians (including expats).
Not bad. They make good wages, pay their taxes and raise the next taxpayers.
And it takes about 1 or 2 CRA workers just to keep Sailo on the straight and narrow.

#57 dragonfly58 on 04.10.22 at 5:15 pm

Out here in the suburban / rural interface in the Fraser Valley I don’t think things have fallen a nickel yet.
Case in point , yesterday wife and I attended a open house a couple of miles away.
Small for the area at 2 acres and bordered at the rear by a fish bearing stream, so a 30 meter set back required . Existing house is far too close to the stream and although grandfathered could not be rebuilt. And really not too much of a house, 50 years old and showing the strain of every year plunked out in the rainforest.
Area is popular with the horse set, but every other property on the street is at least 5 or 10 acres and much more suited to horses. 2 Acres are really just enough.
Street lined on both sides with vehicles turning up for the open house ” event ” . House and yard filled with potential buyers hoping to have a chance in what will no doubt end up a bidding war.
Asking price , just 2.5 million. For what is essentially a compromised , small for the purpose , building lot.
Hammer price will probably be close to 3 mill. plus whatever the stable and McMansion set you back. All to be the low end property owner on the street.
NUTS !! This place last sold in the early 90’s for just over $200 K and probably wasn’t much of a catch even then, prior to 30 years further composting of the structure.
The mind boggles at what the nice places on the street would go for.

#58 IHCTD9 on 04.10.22 at 5:16 pm

#43 Joseph R. on 04.10.22 at 3:35 pm
#19 Stone on 04.10.22 at 1:29 pm
The annual contribution limit is $8,000 – or 30% more than you can put into a TFSA (also unfair) – but there’s a lifetime limit of $40,000. The FHSA is also a use-it-or-lose-it thing since unused contribution room doesn’t accumulate, and expires after 15 years. If the money hasn’t been used to buy a house by then, the account must be closed (but you walk away with 15 years of untaxed compound growth of assets and the tax reduction for having put $40,000 in over that time. Sweet.).

———

So, do you pay tax on the FHSA if you don’t buy a house and the 15 year period expires and your funds from it?

———————————————————

Yes, you have to close the account. However, there seem to be a contradiction on the website: https://budget.gc.ca/2022/report-rapport/tm-mf-en.html#a2_1

At first, it states all withdrawals not done to purchase a first house is taxable:

Withdrawals and Transfers

Amounts withdrawn to make a qualifying first home purchase would not be subject to tax. Amounts that are withdrawn for other purposes would be taxable.

However, further down it states:

If an individual has not used the funds in their FHSA for a qualifying first home purchase within 15 years of first opening an FHSA, their FHSA would have to be closed. Any unused savings could be transferred into an RRSP or RRIF, or would otherwise have to be withdrawn on a taxable basis.

You can transfer the funds to a RRSP, in-kind, without paying taxes, if you have enough RRSP contribution room
——

You don’t need to have the room, from the same link:

“Transfers to an RRSP or RRIF would not be taxable at the time of transfer, but amounts would be taxed when withdrawn from the RRSP or RRIF in the usual manner. Transfers would not reduce, or be limited by, the individual’s available RRSP room.”

This deal was custom made for wealthy renting folks. There’s nothing here to help 98% of kids get into a house, but if you got $$$ in RRSP’s it’s a tax free cash cow of epic proportions.

Good job Trudeau.

#59 crowdedelevatorfartz on 04.10.22 at 5:23 pm

@#41 A quintillian ways to describe Boomers
“saprophytes”
+++
Nice!
I was thinking we Boomers were more like a financial succubus than a human saprophyte but I’ll take any praise where I can get it.

#60 crowdedelevatorfartz on 04.10.22 at 5:27 pm

@#48 Soren
“Les wow in France.”

+++

Yeah.
Macron was getting a tad arrogant.
Didnt show up to the first few political debates until his numbers started tanking and his advisors started warning him.
He’s been in one debate and apparently Le Pen is mightier than the Bored.

He’s paying attention now.
I’m thinking he’ll win Apr24th….but not by much.

#61 crowdedelevatorfartz on 04.10.22 at 5:30 pm

@#38 IHCTD9
“Maybe he felt all the X/Boomers who own houses have received enough, so now it’s time to stuff the bank accounts of well off renters as well?”

+++
Hey.
I don’t question Liberal stupidity.
I’ll just take full advantage of it.
Another $8000 per year into a glorified TFSA/RRSP.
Why not.

#62 Dr V on 04.10.22 at 5:33 pm

49 Concerned

I have to agree on every point.

#63 Reality Check on 04.10.22 at 5:34 pm

So the FHSA/RRSP contribution in kind angle. Talk about your double dipping, getting to claim the same $ twice if you meet the criteria for opening a FHSA.
_—————

In the feds’ tax document it does specifically say you get the tax deduction for the RRSP in kind contribution. So maybe this will not be the case. If it is, it seems like it’s ridiculously rich.

I am a Boomer that hasn’t owned since 2006 so either way I’ll be loading up and making sure my kids can all load up.

#64 Reality Check on 04.10.22 at 5:40 pm

In Vancouver, seems most of listings get snatched within a week, and go 10 to 15% over asking price. Based on a few listings that I have followed. (just recently saw two 3bdr townhomes in port moody listed for 1.2Mil, sold for 1.45mill within 5 days)
—————————-

Same in Victoria. Listing still priced to creat bidding wars and generally go 10-25% over ask. Usually sell in first couple days on market, if not immediately. 3 bedroom bungalow in premium part of town $1.5-2 million. In less prime areas $1-1.3 million.

Absolute insanity.

#65 Bob Hamilton on 04.10.22 at 5:41 pm

I’ve seen this movie before, maybe four years ago, directed by Bill Morneau. From my front door I could see two houses that sold for about 200k over list, they didnt close. Is Bill still in showbiz?

#66 Sail Away on 04.10.22 at 5:47 pm

#46 Ponzius Pilatus on 04.10.22 at 3:47 pm
#11 Sail Away on 04.10.22 at 1:02 pm
Thanks Garth!

Two other notes about the FHSA:

1. If not used, accumulated cash can be transferred to RRSP without affecting RRSP room
2. Nowhere does it stipulate FHSA can only be used for Canadian RE

https://budget.gc.ca/2022/report-rapport/tm-mf-en.html

———–

Thank you, Sailo
Gonna E-mail my NDP MP right away.
Lets close this loophole.

———–

Not surprising. In every walk of life, there are the disaffected who will expend effort to make life more difficult for others for no apparent reason or benefit to themselves. Sad.

#67 crowdedelevatorfartz on 04.10.22 at 5:51 pm

@#66 Sail Away
“Ahh. It’s so pleasant to see such open-minded tolerance and acceptance of differing opinions. And expressed in a way that reflects so well on the commenter.”

+++
Easy on the kid Sailo.
I’m sure they spent a ton o cash on that education before Starbucks hired.

#68 IHCTD9 on 04.10.22 at 5:52 pm

#41 Quintilian on 04.10.22 at 3:22 pm
Not surprised oh how the irony is lost here.

The ink has not yet dried, and the human saprophytes have their saliva glands on max power to gorge on morsels handed out by the government they hate.
———

That’s right. You keep making excuses for Trudeau’s bungled policies, and I’ll keep making bank. Now it looks like the Libs will allow me to dodge a fat slice of my retirement income taxes on top. Dude, if you keep voting for it, you can rest assured I’m going to take advantage of it, as will 99% of everyone else. These kinds of handouts just never happen, and when Trudeau’s gone so are the Trudeau bucks. I’m backing up the truck homie, and I’m not the only one.

How can you not possibly see what’s going on here? Either Trudeau is the dumbest politician who has ever lived, or he’s in it to enrich old stock Canucks like me.

Which do you think it is?

Just remember, your boy did this to you, not mine.

#69 Dr V on 04.10.22 at 5:52 pm

21 IDK

“Although it’s a good wager that house prices will be
higher in five years.”
————————————–

Please dont under estimate the possible length and
breadth of market slowdowns.

Checked my assessments over the following years. Though not always accurate to a particular property,
they can be a good indicator of the overall market.

2008 to 2016 -15% (larger family home)

1995 to 2001 -19% (starter home)

I would consider the second one more accurate to the market value as I was carefully tracking it during this period. The first one I didnt care so much as the
mortgage was paid off early. Both properties on East coast of VI.

#70 Reality Check on 04.10.22 at 5:52 pm

41 Quintilian

The ink has not yet dried , and the human saprophytes have their saliva glands on max power to gorge on morsels handed out by the government they hate.
———————-
Yep, I dislike the government but I LOVE the free money.

I have always taken EVERY government handout I can, going back to UIC “ski team” days (anyone else remember “pogey”?). After all over the course of my lifetime I am going to pay well over $2 million in taxes to the various levels of government.

Governments pee-away so much money. I might as well get the benefits I am legally entitled to.

#71 Sail Away on 04.10.22 at 5:56 pm

#69 Laura Morrison on 04.10.22 at 3:36 pm

i was told to get a love spell doctor contact to help me out which i did i was lucky to get DR.ODIDI Contact who was able to help me out, he cast up a love spell that brought back my husband to me and to his kids thanks so much DR.ODIDI

———

Oh, thanks Laura.

So good to finally have a lead on a good love spell doctor.

#72 SimplyPut7 on 04.10.22 at 5:59 pm

Hi Garth (or anyone in the comment section familiar with this account),

Does that mean for retirement or estate planning, if an older adult of sound mind (in their 80s, 90s, 100s) sold their home and wanted to rent or live with adult children; they could open the account, put up to $8,000 away a year to a max of $40,000 for the next 15 years, and have a beneficiary attached to the registered account similar to TFSA, RRSP, RRIF?

Does this mean people in charge of caring for elderly relatives or family members with long-term disabilities can use this fund to help plan long-term care and/or gift the funds going into this account to reduce expenses associated with caring for elderly relatives?

Also, is this the only other tax shelter and tax deduction for older adults (other than life insurance which is expensive after a certain age) since the TFSA is available for people over 71 and most of the other investment/retirement accounts require you to start taking money out to be taxed by the government?

Thanks,

#73 Umuzi on 04.10.22 at 6:00 pm

My spouse has not been on title for our owned home for many years. Does that mean my spouse can now open an FHSA account?

#74 earthboundmisfit on 04.10.22 at 6:05 pm

Nice company you’re keeping here Mr. Turner. The FHSA is not even enacted yet, and half your crowd is already trying to figure out how to game the system.

#75 Paul from Surrey on 04.10.22 at 6:08 pm

LOWER MAINLAND – but its different this time, everyone wants to live in BC, isn’t RE all local???
Over to you #55 Comrade

#76 Stoph on 04.10.22 at 6:22 pm

Why doesn’t the government simply allow $40k to be withdrawn from RRSPs tax free when buying a house or allow people to deduct up to $40k of TSFA contributions and give the registered account the extra contribution room?

These approaches are quite similar to what’s proposed but would be much simpler to implement rather than making a whole new registered account.

#77 Ustabe on 04.10.22 at 6:26 pm

Can we please stop using the word “woke”?

First, most of you doing so are applying the term to those who definitely are not and second is is a profoundly intellectually specious concept at its best.

Like CRT in the US, everybody just knows they should be against it but very few know what it is.

Use your words carefully, those who would use “woke” as some form of insult only insult themselves.

#78 Philco on 04.10.22 at 6:48 pm

#38 IHCTD9 on 04.10.22 at 3:16 pm
————————-
HAHA ya all those free lunches come at cost.
The more money poured on the the more my assets went up. WIN WIN.
UN report says global food prices rose 34% in a year.
Your CERB shrinking dudes.
Going to need more money on that fire.

#79 stats freak on 04.10.22 at 6:49 pm

I live common law and I am not on title, only my partner is. Do we expect someone like me could open an account? Wonder what if my spouse were to pass away and I get the house, then what happens? hmmm….

#80 Nonplused on 04.10.22 at 7:06 pm

Tax free on the way in AND on the way out? What a boondoggle. Clearly this is a vote buying scheme.

It escapes my mind to understand why a “home ownership savings plan” should have anything tax free about it, since a house is a consumer item for the most part. And why is saving for a house more important than saving for retirement? Sure your RRSP gives a nice tax deduction on way in, but in retirement withdrawals are taxed as ordinary income. So you don’t escape any taxes really, just delay them. And it could be argued that the retirement income from an RRSP is more important to financial security in old age than owning a house might be, as Garth has gone over 100 times.

Or even compared to the TFSA, which could already be used to “save” for a down payment, you still have to pay tax on money headed in, just not on withdrawals (assuming you make any money, which is not guaranteed).

So how is the home savings plan tax free in both directions? How is this anything but a taxpayer funded gift to home sellers? (It gives more money to buyers, and spend it they will due to the laws of competition.)

Once again we see that any “solution” proposed by the government only makes matters worse.

#81 Nonplused on 04.10.22 at 7:13 pm

#77 Ustabe on 04.10.22 at 6:26 pm
Can we please stop using the word “woke”?

—————————

Why? “Woke” was originally used by the “woke” to describe themselves. But its not ok if the “non-woke” start using it to describe the self-described “woke” people?

I got another idea: I’ll use the words I like and if you don’t like it you can suck an egg. My words are my own and you will neither add nor subtract from them.

#82 crowdedelevatorfartz on 04.10.22 at 7:13 pm

@#74 mudstuckmisfit
“Nice company you’re keeping here Mr. Turner. The FHSA is not even enacted yet, and half your crowd is already trying to figure out how to game the system.”

+++
What’s a little financial gossip among friends?
And if we can avoid paying taxes to an incompetent band of self important, politically correct, gender fluid, twits…..mores the better.

#83 crowdedelevatorfartz on 04.10.22 at 7:15 pm

@#78 Fillco
“UN report says global food prices rose 34% in a year.”

+++

Bread makers are on sale at Canadian Tire…

#84 Ponzius Pilatus on 04.10.22 at 7:21 pm

#77 Ustabe on 04.10.22 at 6:26 pm
Can we please stop using the word “woke”?

First, most of you doing so are applying the term to those who definitely are not and second is is a profoundly intellectually specious concept at its best.

Like CRT in the US, everybody just knows they should be against it but very few know what it is.

Use your words carefully, those who would use “woke” as some form of insult only insult themselves.
——————
Agree,
I consider it the equivalent of a cave man grunting:
“Me smart, you woke”

#85 Old Boot on 04.10.22 at 7:29 pm

I’m aghast at the tax revenue that will be lost from the FHSA/RRSP finagle. All to encourage ‘investment’ in an asset that also generates no tax revenue.

#86 I don’t know on 04.10.22 at 7:32 pm

Dr V on 04.10.22 at 5:52 pm

Indeed. The recent run up of prices in some areas is unsustainable and they will fall.

Real estate (especially detached) in high demand urban areas is a different story though. This is what most people who complain about “affordability” really want -a detached in an urban area, which is a luxury.

The last time our urban centres experienced any meaningful slowdown was when our population was 15 million less than it is now. The number of housing units being built has been nowhere near enough for a variety of reasons that won’t be going away any time soon.

Those expecting a repeat of the 80’s are going to be sorely disappointed.

IDK

#87 IHCTD9 on 04.10.22 at 7:58 pm

#72 SimplyPut7 on 04.10.22 at 5:59 pm
Hi Garth (or anyone in the comment section familiar with this account),

Does that mean for retirement or estate planning, if an older adult of sound mind (in their 80s, 90s, 100s) sold their home and wanted to rent or live with adult children; they could open the account, put up to $8,000 away a year to a max of $40,000 for the next 15 years, and have a beneficiary attached to the registered account similar to TFSA, RRSP, RRIF?

Does this mean people in charge of caring for elderly relatives or family members with long-term disabilities can use this fund to help plan long-term care and/or gift the funds going into this account to reduce expenses associated with caring for elderly relatives?

Also, is this the only other tax shelter and tax deduction for older adults (other than life insurance which is expensive after a certain age) since the TFSA is available for people over 71 and most of the other investment/retirement accounts require you to start taking money out to be taxed by the government?

Thanks
————

As currently described, if you don’t use the FHSA cash to buy a house with at the end of the day, it’ll end up either taxed upon withdrawal, or stuffed into an RRSP/RRIF and taxed per those rules. So no benefit beyond an RRSP. Nothing is going to come out of there tax free unless you buy a house. At least from what I can tell.

#88 Jenna on 04.10.22 at 8:02 pm

I have it from a reliable source the BOC will be holding rates on Wednesday.

#89 Sail Away on 04.10.22 at 8:32 pm

#77 Ustabe on 04.10.22 at 6:26 pm

Can we please stop using the word “woke”?

———-

No, but thanks for asking politely.

#90 When the Whip Comes Down on 04.10.22 at 8:36 pm

#88 Jenna – hahahahaha…yeah we will see about that soon enough. Wouldn’t that be the ultimate shock.

#91 Bronze Bullet on 04.10.22 at 8:36 pm

#53 rampant inflation on 04.10.22 at 4:44 pm

short rates will get to 3.50-4% in 2023 some time.

you can bet on that

——————————–

IMHO and in the view of many analysts rates will not increase above 2.00-2.25 % at the top of this ‘tightening’ cycle. 2.5 % is possible as an exception/low probability/ but only temporary. At the signs of ‘recession’ rates will be dialed immediately back to 1-1.5 % before the next QE.

Trust central bankers at your own risk.

I have been hearing about the rate increases in the last 12 years and absolutely nothing happened, as a result after all that talk rates are at 0.5 % and that is the fact, the rest is utter BS.

Inflation has been rampant, specially in assets in these 12 years, now food and energy inflation catches up.

#92 Mark on 04.10.22 at 8:39 pm

“So, we’ll just let Mr. Market do his thing.”

well, considering we followed the U.S.’s insane parabolic house price curve up until 2009 and things kept getting more insane ever since….better late than never?

#93 crowdedelevatorfartz on 04.10.22 at 8:49 pm

@#88 jenna
“I have it from a reliable source the BOC will be holding rates on Wednesday.”

+++
Tiff talks in his sleep Jen?

#94 rampant inflation on 04.10.22 at 8:49 pm

Shanghai is in total lock down and about to explode. People have been without food for days.
Lebanon is out of wheat. Last shipment was ruined by moisture. No currency reserves to buy more.
Sri Lanka is starving, their currency has collapsed and they have food and fuel shortages.
Peru is in violent protests over rising prices.
North Africa faces a high potential for civil unrest and political turmoil as global food costs rise more than 50% from mid 2020.

Millions are going to starve worldwide.
Disruptions in trade. General strikes for higher wages. …
There is a baby formula shortage in the US.
The world is in serious trouble.

but it’s better not to look.

#95 IHCTD9 on 04.10.22 at 8:54 pm

#86 I don’t know on 04.10.22 at 7:32 pm
Dr V on 04.10.22 at 5:52 pm

Indeed. The recent run up of prices in some areas is unsustainable and they will fall.

Real estate (especially detached) in high demand urban areas is a different story though. This is what most people who complain about “affordability” really want -a detached in an urban area, which is a luxury.

The last time our urban centres experienced any meaningful slowdown was when our population was 15 million less than it is now. The number of housing units being built has been nowhere near enough for a variety of reasons that won’t be going away any time soon.

Those expecting a repeat of the 80’s are going to be sorely disappointed
———-

I’m torn between the knowledge that all these newcomers drive the rental market in big urban centres, and this drives RE investment. Like ~50% worth of YVR condos selling to investors last year. But also understanding that there are many amateur LL’s who have HELOC’d, Brampton Mortgage’d, and B Lender’d themselves into a very tight spot, and are totally dependent on big appreciation. Even if RE goes sideways, these folks are in the red. I think there could be a ton of these folks out there in the gta and gva. Then add on the big Covid spike which would have abated even without hikes, and we have hikes. Might be enough to spark fear. We all know what that does, and we know a ton of recent buyers were brimming with it on the way in.

Too early to call. Bunny patch will sink back to normal for sure. Urban? Could keep going, could blow a mile high. The trouble starts if and when prices nose over. We’ll see what the BOC does…

#96 Rochdale GM on 04.10.22 at 8:57 pm

Get outta town! Are you serious? You mean I can transfer assets in kind from my non reg account into a FHSA (with no serious intention of buying RE), and if I live for 15 more years, I can just transfer the assets back into a non reg account easy peasy? That sounds awesome!

#97 SimplyPut7 on 04.10.22 at 9:04 pm

#87 IHCTD9 on 04.10.22 at 7:58 pm

—-

For those past 71 it may still be beneficial if they can move the amount to a RRIF because you can’t contribute after 71 to RRSP or RRIF (when retirees realize they should have saved more for retirement).

It’s also another way of ensuring surviving family members would have access to the funds if the account holder named beneficiaries but didn’t have a will.

I think the aging population is a bigger iceberg than rate hikes or young people not being able to afford a house. They are all bad situations, but for some adults, getting older is going to be a bigger problem than they think.

#98 Observer on 04.10.22 at 9:26 pm

Can the FHSA contribution be used to reduce tax on non-earned income (examples: RRSP withdrawals or investment income)?

#99 Ustabe on 04.10.22 at 9:30 pm

#81 Nonplused on 04.10.22 at 7:13 pm

#77 Ustabe on 04.10.22 at 6:26 pm
Can we please stop using the word “woke”?

—————————

Why? “Woke” was originally used by the “woke” to describe themselves. But its not ok if the “non-woke” start using it to describe the self-described “woke” people?

I got another idea: I’ll use the words I like and if you don’t like it you can suck an egg. My words are my own and you will neither add nor subtract from them

I, too, have another idea. How about you Google or Bing up the origins of the word/concept of being woke as it pertains to today’s usage. You will find it was African American vernacular that was co-opted by the right in the US to use as a pejorative.

Anyway, sorry for hurting your obviously fragile feelings by posting on this matter.

#100 Satori on 04.10.22 at 9:32 pm

“At that time the FHSA was earmarked only for people under 40, proving once again that ageism is perfectly fine for all the woke people who hate every other ‘ism.’”
—————————————————–
Well said Garth!

If you are confused about the word WOKE please Google it before you turn ‘woke’ into a another ‘ism’!! ???! :|

#101 Flop… on 04.10.22 at 9:36 pm

10k signing bonus to become a truck driver at the moment in B.C.

Driving past the “You are now leaving Vancouver” sign every couple of days…

Priceless…

M47BC

#102 WTF on 04.10.22 at 9:36 pm

Sold the house more than 4 yrs ago, invested the proceeds, made oodles of ka-ching, desperate for a tax break.

All of a sudden I’m liking PM Singh’s budget……
—————————————————————
#41″The ink has not yet dried , and the human saprophytes have their saliva glands on max power to gorge on morsels handed out by the government they hate.”
————————————————————–
Finally that english lit degree has come in useful, albeit anonymous on a pathetic blog. Well done!

#103 Philco on 04.10.22 at 9:38 pm

#83 crowdedelevatorfartz on 04.10.22 at 7:15 pm
@#78 Fillco
“UN report says global food prices rose 34% in a year.”
+++
Bread makers are on sale at Canadian Tire.
**********
Ill sell ya mine its collecting dust.
My freezers full of beef ahi tuna sockey organic chickens.
Foods never gonna be a problem here. Unfortunately many globally will suffer.
That said nothing like a fresh loaf and a pile of butter :-)

#104 crowdedelevatorfartz on 04.10.22 at 9:45 pm

@#94 Rampant greed
“but it’s better not to look.”

+++
Ok, we won’t.
Boomers are busy shuffling money aside for the new Liberal tax free fandango.
I feel so Boomer rich I want to conspicuously buy something just so I can throw it away in an obscene display of gluttony…..

https://www.youtube.com/watch?v=v48apTLrSs8

How can I thank Trudeau and Freecash while not voting for them?

#105 WTF on 04.10.22 at 9:45 pm

Off topic but very interesting presentation to the House of Commons Finance Committee

“CPI considers the cost of housing as its most important component. In the CPI “shelter costs” are weighted 31%. But while house prices increase at 7% or more the shelter component of inflation increased by only 2.6 percent per annum.

It might be a surprise to learn that the CPI does not include house prices when calculating inflation.”

#106 Inadequate on 04.10.22 at 9:54 pm

This FHSA sounds really cool. A great tool that I can use to limit my 2022 taxable income to about 150000k.
My new contribution priority will be FHSA, RRSP then TFSA based on what I read here.

#107 IHCTD9 on 04.10.22 at 10:35 pm

#103 Philco on 04.10.22 at 9:38 pm

That said nothing like a fresh loaf and a pile of butter :-)
——

You got that right! A nice warm crusty loaf with a 1/4” of real butter is damn hard to beat :D

#108 Shawn on 04.10.22 at 11:13 pm

Spreading Misinformation about CPI and the housing component.

#105 WTF on 04.10.22 at 9:45 pm
Off topic but very interesting presentation to the House of Commons Finance Committee

“CPI considers the cost of housing as its most important component. In the CPI “shelter costs” are weighted 31%. But while house prices increase at 7% or more the shelter component of inflation increased by only 2.6 percent per annum.

It might be a surprise to learn that the CPI does not include house prices when calculating inflation.”

******************************
You (and your souirce) are right that housing (shelter) is a surprisingly fat 31% of the total basket weight in CPI. How many here have claimed it is not even in there?

In The February numbers released last week the housing inflation was reported as being up 6.6%. Your 2.2% claim in your source is misinformation. (It’s bull)

https://www150.statcan.gc.ca/n1/daily-quotidien/220316/t001a-eng.htm

And of course the shelter component does not just take into account home sale prices. It has to take account of the average situation where many are renters and most already own. There is actually a component for “replacement cost of the house”.

Explore it all on the nice graph here that I linked to several times in recent posts. Report back with complaints after first looking at the facts.

Get your facts here:

https://www150.statcan.gc.ca/n1/pub/71-607-x/2018016/cpi-ipc-eng.htm

And explore the historical inflation by hundreds of components here:

https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2018016-eng.htm

#109 willworkforpickles on 04.10.22 at 11:13 pm

RE will not fare well through the economic maelstrom coming over the next 5 years no matter what the BoC or Fed does.
That you can and should plan accordingly to ahead of time.

#110 Unpinned on 04.10.22 at 11:32 pm

Salt Lake City suburbs are the dreams of City Planners across Canada…the roads; the shopping; the parks; everything here functions and looks like Oakville would be but can never be. A big highlight is the fashion…you know how leggings rule Canada like people have nothing to wear except fitness tights. Not here…it’s almost like they don’t own leggings in Salt Lake City. The people are stylish and attractive but young to old…no leggings. So we see the world is subject to change and what was old is now new. Also people are very decent…it perks me up.

#111 TurnerNation on 04.10.22 at 11:45 pm

ATVs? Meh. Here’s something that, yellow tractor guy can spend those T2 bucks on.

https://argoxtv.com/ca/vehicles/sherp-product-a

There’s no replacement for displacement.

#112 Shawn on 04.10.22 at 11:47 pm

How Statistics Canada includes Housing costs in CPI

https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001-eng.htm

Facts matter… even though emotion generally trumps facts.

#113 DON on 04.10.22 at 11:59 pm

https://www.reuters.com/business/global-markets-wrapup-1-pix-2022-04-11/

I don’t know should read the above with respect to inflation.

April 10, 20228:18 PM PDT
Last Updated 31 min ago
Asia shares slip ahead of ECB meeting, U.S. inflation test.

#114 Dr V on 04.11.22 at 12:04 am

111 TN

“There’s no replacement for displacement.”
————————————–

Yes sir, 1.8 litres!!

#115 IHCTD9 on 04.11.22 at 12:06 am

#111 TurnerNation on 04.10.22 at 11:45 pm
ATVs? Meh. Here’s something that, yellow tractor guy can spend those T2 bucks on.

https://argoxtv.com/ca/vehicles/sherp-product-a

There’s no replacement for displacement
——-

Those things are awesome. There’s a Sherp dealer down the road from me. They had one out by the road last summer, 170K! T2 is gonna have to step up his handout game before I put one of those in the garage.

#116 bdwy on 04.11.22 at 12:31 am

Inflation has been rampant, specially in assets in these 12 years, now food and energy inflation catches up.

//////
which is for the first time in 12 years, showing up in the cpi.
the fed got away with keeping rates in the toilet for so long only because cpi was low.

it’s different now.

runaway inflation may need 5-6% fed to tame it.

#117 Jessica on 04.11.22 at 12:53 am

#71 Sail Away on 04.10.22 at 5:56 pm
#69 Laura Morrison on 04.10.22 at 3:36 pm

i was told to get a love spell doctor contact to help me out which i did i was lucky to get DR.ODIDI Contact who was able to help me out, he cast up a love spell that brought back my husband to me and to his kids thanks so much DR.ODIDI

———

Oh, thanks Laura.

So good to finally have a lead on a good love spell doctor.

—-

This was a hilarious response. I cried laughing. Best response ever to spam, ha ha.

—-

On another note, everybody chill. The rules are still being written. At the end of the day, there won’t be loopholes for double dipping.

#118 None on 04.11.22 at 12:55 am

So I put in 8K per year for 5 year. Really, b/c I make 100K per year, I really only put in 5,600 per year. After 5 years that’s 28,000

After 5 year that 8K yearly contribution at 7% grows to $49,000. I let that coast for another 10 years at an average 7% and end up with $97,000 TAX FREE.

Is that the math? because….. god damn that’s for the cheddar Justin!

#119 IHCTD9 on 04.11.22 at 7:28 am

#118 None on 04.11.22 at 12:55 am
So I put in 8K per year for 5 year. Really, b/c I make 100K per year, I really only put in 5,600 per year. After 5 years that’s 28,000

After 5 year that 8K yearly contribution at 7% grows to $49,000. I let that coast for another 10 years at an average 7% and end up with $97,000 TAX FREE.
———-

That’s right, but the only way you can liberate all that without being taxed on it either immediately or later, is to then sling it into a PR.

I believe Trudeau’s rules are that you must live in the thing for 366 days, then you are free to flip it tax free, and cash out completing the circle.

Any loopholes that exist might be closed up in 15-20 years, so don’t wait too long to open the account.

#120 TurnerNation on 04.11.22 at 8:29 am

#16 B from Q on 04.09.22 at 1:58 pm
So, pandemic is over?
Order in Council P.C. 2022-320 and 2022-321 extended till May 31st 2022.
Worked so well so far, so let’s extend it to eternity…
https://orders-in-council.canada.ca/attachment.php?attach=41802&lang=en
https://orders-in-council.canada.ca/attachment.php?attach=41803&lang=en

——————

^^ That’s right B from Q. This is not designed to “be over” no matter how much the people comply. For this reason alone it makes sense divesting of Real Estate in this Former First World Country. While you are able.

— We knew this TWO years ago in April 2020. When the helpful WEF released this chart. Hey but dont’ call it a reset! https://tinyurl.com/3eaxxpkz

— Allmost over guys . It all makes sense when you realize that to our global rulers WE are the virus to be controlled
Our Travel, Our Feeding, Our Breeding. Keeping us in fear will do this.

.UK NHS chiefs call for the return of masks and limits on indoor mixing (dailymail.co.uk)

.Ottawa’s mayor calls for mandatory masks in essential stores, schools and on public transit(ottawa.ctvnews.ca)

#121 Ballingsford on 04.11.22 at 8:40 am

DELETED

#122 crowdedelevatorfartz on 04.11.22 at 8:47 am

@#111 Turner nation.
An Argo Sherp
+++

As Alan Arkin so eloquently put it in the movie Argo.

“Argo…..!”

https://www.youtube.com/watch?v=h7E9gJf5cjw

#123 rampant inflation on 04.11.22 at 9:22 am

Does anyone see the measure for the actual COST OF A HOUSE?
we all understand completely. LET”S NOT MEASURE WHAT HOUSING COSTS
we’ll measure other things.

Relative shares of shelter and its subcomponents in the CPI basket

Rented accommodation 6.4
Rent 6.2
Tenants’ insurance premiums 0.1
Tenants’ maintenance, repairs and other expenses 0.1

Mortgage interest cost 3.5
Homeowners’ replacement cost 4.8
Property taxes and other special charges 3.4
Homeowners’ home and mortgage insurance 1.3
Homeowners’ maintenance and repairs 1.4
Other owned accommodation expenses 1.6

Electricity 2.4
Water 0.6
Natural gas 0.9
Fuel oil and other fuels 0.3

“The basic principle is to treat homeowners as if they were renting their own dwelling. Any expenses that a landlord would normally incur are included (even imputed expenses such as the replacement cost). However, the capital gain and the opportunity cost associated with capital invested in the dwelling are excluded, since they are considered as investment rather than consumption.”

what a joke. if i’m renting my own home, i should at least be able to deduct my expenses.
CPI is a SCAM

inflation is RAMPANT

#124 Dharma Bum on 04.11.22 at 9:33 am

The cohort that doesn’t currently own homes (young people, lower income people, etc.) are the same that typically are not money savers, financial planners, investors, etc.

Most don’t even have a TFSA or RRSP. Most can’t afford to save, let alone invest. They cannot accumulate enough cash to rub two nickels together.

So, this FHSA is now miraculously going to be the catalyst that suddenly enables them to afford a home? By taking advantage of tax free investment income growth?

Hah! That’s rich (no pun intended).

The only folks who this dumb gimmick is going to help are those who already intentionally do not own homes. Those renters who have, for financially strategic reasons or lifestyle choices, specifically opted to not have their financial assets tied up in real estate. Their reasons are valid and legitimate. As Garth said, owning a home is not the goal of life, nor the be all and end all. It’s a lifestyle choice for some, and a financial strategy for others, or both.

Those individuals are now able to freely take advantage of the FHSA by manipulating the gaping loopholes (RRSP transfers in kind to FHSA, etc.).

I cannot believe that there is not even the provision that if the money is not used to purchase a home within the specified time frame, the growth and income earned within the FHSA becomes fully taxable at the FHSA holder’s current marginal rate.

Like an RESP.

Besides, the paltry limit on the FHSA makes the accumulated amount allowed to be invested in it virtually negligible in terms of assisting in the “affordability” of a house to those who could otherwise not afford a house in the first place, especially given what houses are going to cost in 15 years time.

Hold onto your hats, kiddos.

What a farce.

What’s next? FCSA? (First time car buyer savings account).

Although, that would make more sense.

#125 Quintilian on 04.11.22 at 9:48 am

https://www.macrobusiness.com.au/2022/04/colossal-new-zealand-housing-bubble-engulfs-economy/

“ [Kiwi] economists and financial markets are tipping sharp increases in mortgage rates to between 6.25% and 7.5%, which would add up to $1,250 in monthly mortgage repayments to the median priced New Zealand home ($1,700 a month in Auckland)”

Question for the masterminds :

New Zealand, Canada, Australia, Austria, Sweden, Norway, Denmark, UK, Spain, France are the worst in the world.

What do they have in common?

Hint:
Trudeau is not the answer.

#126 Sail Away on 04.11.22 at 10:10 am

#118 None on 04.11.22 at 12:55 am

Re: FHSA

After 5 year that 8K yearly contribution at 7% grows to $49,000. I let that coast for another 10 years at an average 7% and end up with $97,000 TAX FREE.

———-

Yep, another golden registered account. Always, always take full advantage of these. Our RESPs ended up with significantly more than needed for two kids’ university costs, so they’ll get the remainder (which are tax-free contributions due to proper distribution designation) to do with as they will- and, fortuitously, they’re entering full-time workforce just as the FHSA kicks in, so can take full advantage.

7% nothing. This will be used as an aggressive investing vehicle similar to TFSA. My projections are closer to $400k after 15 years.

Of course, a perfect moneymaking vehicle like this won’t squandered on a house purchase, though. That would be silly.

#127 OK, Doomer on 04.11.22 at 10:29 am

#1 Wozzy13 on 04.10.22 at 12:30 pm
The libs have been pushing housing price higher I’m not so sure they will let them fall the dollar is rapidly losing ppower will higher rates put a brake on this I’m not sure of that either….
+++++++++++++++++++++++++++++++++

Interest rates are the 800 pound gorilla. As much as they have the power to destroy a family budget of spendthrift wastrels, it has the same ability to destroy the budget of government spendthrift wastrels.

Equal treatment under the (economic) law.

#128 Senator Bluto on 04.11.22 at 10:38 am

Charest just lost my support.

By taking the intolerant Trudeau-ist line against the truckers (whether you agree with them or not, they are still all fellow Canadians and deserve to be heard, a fact which Trudeau bumbled into a national crisis) Charest showed me that he has no respect for people with differing views.

Not sure who else to support yet, but it won’t be Charest. We need a Conservative government that is more open and tolerant than Trudeau’s.

Luckily Trudeau set the bar pretty low.

#129 DON on 04.11.22 at 10:51 am

#127 OK, Doomer on 04.11.22 at 10:29 am
#1 Wozzy13 on 04.10.22 at 12:30 pm
The libs have been pushing housing price higher I’m not so sure they will let them fall the dollar is rapidly losing ppower will higher rates put a brake on this I’m not sure of that either….
+++++++++++++++++++++++++++++++++

Interest rates are the 800 pound gorilla. As much as they have the power to destroy a family budget of spendthrift wastrels, it has the same ability to destroy the budget of government spendthrift wastrels.

Equal treatment under the (economic) law.

**********
And Inflation is the 2 ton shark in the pool.

#130 Shawn on 04.11.22 at 11:19 am

Measuring the cost of living CPI

Rampant Inflations said:

#123 rampant inflation on 04.11.22 at 9:22 am
Does anyone see the measure for the actual COST OF A HOUSE?
we all understand completely. LET”S NOT MEASURE WHAT HOUSING COSTS
we’ll measure other things.

***************************************
He then went on the give the evidence that Statistics Canada actually does include the various costs of shelter whether renting or owning and gives weight to each component.

But having already made up his mind he concludes CPI is a SCAM.

Well, I give him full credit for at least looking at the facts before refusing to accept them.

#131 Brett in Calgary on 04.11.22 at 11:22 am

The only way I can see the FHSA helping an 18-year old renter is if mom and dad can gift him/her money for it.

Yes, that defeats the tax deduction, but many of the folks this account should be helping won’t need large tax deductions from 18-33 (i.e. 15 years).

The folks it could “help” will already be well-off, and may have chosen to rent over own the past while, or have potentially owned a home in the distant past. I agree, this is a nothing burger.

#132 crowdedelevatorfartz on 04.11.22 at 11:44 am

@#125 A quintillian reasons to complain
“What do they have in common?”

+++
A plethora of incompetent, Woke, whiners, bogging up the govt bureaucracy….?

#133 rampant inflation on 04.11.22 at 11:55 am

there are TWO EVENTS in monetary history that matter in the last 100 odd years.

1. the creation of the FED in 1913 (the ability of bankers to steal from the people)

and

2. the closing of the Gold window in 1971 (the ability of governments and corporations to steal from people)

what happened in 1971…. here are a bunch of charts to help people realize what kind of theft has been perpetrated

https://wtfhappenedin1971.com/

#134 jess on 04.11.22 at 1:03 pm

from the doj …”JELANI WRAY was one of several leaders of a massive no fault automobile insurance scheme spanning New York and New Jersey from at least in or about 2013 through in or about 2019. As part of the scheme, WRAY personally bribed and arranged for others to bribe 911 operators, medical personnel, and police officers for the confidential information of tens of thousands of motor vehicle accident victims. Using this information, WRAY and his co-conspirators contacted victims, lied to them, and steered them to clinics and lawyers handpicked by WRAY and his associates. These clinics and lawyers then paid WRAY and his associates kickbacks for these referrals, which they distributed to coconspirators as payments and bribes.

Specifically, in approximately 2013, while WRAY was working as the manager of a medical clinic, WRAY and a coconspirator, ANTHONY ROSE, a/k/a “Todd Chambers,” reached an agreement that for each patient ROSE sent to the clinic, WRAY would pay him approximately $2,000 to $3,000 in illegal referral fees.

Thereafter, in or about 2016, WRAY began to recruit and acquire his own “lead sources,” which were individuals willing to sell the confidential information of motor vehicle accident victims. From approximately 2016 through in or about December 2017, WRAY bribed at least five NYPD 911 operators to provide him with the names and numbers of motor vehicle accident victims. WRAY then transferred this information to an illegal call center that was operated by ROSE and funded in part by WRAY. ROSE’s call center called the unsuspecting accident victims, lied to them, and then steered them to particular clinics and lawyers that were part of ROSE and WRAY’s illegal referral network. The clinics and lawyers then paid ROSE and WRAY kickbacks by cash and check. WRAY also similarly recruited attorneys and clinics to participate in this portion of the scheme.

Among other things, WRAY concealed his bribery of the 911 operators by providing them with prepaid “burner” phones, using encrypted messaging applications
The United States Attorney’s Office charged JELANI WRAY and 26 other defendants in November 2019. All 27 defendants admitted guilt;…”

#135 WTF on 04.11.22 at 1:05 pm

#112
“your 2.2% claim in your source is misinformation. (It’s bull)
Facts matter… even though emotion generally trumps facts”

————————————————————– Thanks for your strident comments and “data”

I’m Gonna presume that someone who (was invited) and presents at a H.O.C. commons finance committee (regarding inflation)as a witness is highly motivated to use “facts” as well?

Perhaps, and I’m speculating, In spite of your assertions and official Government “data” you don’t have all of the info? Nor were you asked to go to Ottawa with your vast knowledge?

I will direct you to the first witness. He lives in Edmonton, maybe you can visit him for a tutorial?

https://www.ourcommons.ca/DocumentViewer/en/44-1/FINA/meeting-34/evidence

#136 jess on 04.11.22 at 1:14 pm

rules -depends ?
https://www.cbc.ca/news/canada/charles-shaker-cra-tax-bill-toronto-penthouses-1.6413795

…”British Columbia is the only jurisdiction in Canada with a beneficial ownership registry for property, implemented in the wake of findings of significant money-laundering in the province’s real estate sector.

#137 Shawn on 04.11.22 at 1:33 pm

Rampant Complainer at 133

Wants people to blame their situation on the creation of the FED in 1913 and the closing of the gold window in 1971?

Give me a break. The average and typical standard of living today is monstrously higher compared to 1913 and also a lot higher than 1971.

Ignore him, obviously.

#138 Philco on 04.11.22 at 1:38 pm

#132 crowdedelevatorfartz on 04.11.22 at 11:44 am

If some worked as hard as the complain they would have something.
Im pretty good at both.

The banks have been a great place to be but this dude is correct i do believe.
First treand is money is flowing to value. Tech and growth are highly valed and risky now.

“This leads to the third trend, a flattening yield curve. As we write this report, the yield curve is about as flat as it can be. Both the 10-year and 20-year US treasuries yield the same amount, between 2.64 and 2.67%. That’s about as flat as you can get and this is not good
for bank stocks. We would therefore predict that the excellent performance of Canadian Bank shares may not continue as well as it has
in the past. They cannot earn the easy returns they are used to generating on their large books, and that is a serious problem for
investors, as they become “no growth” stories.”

Do not copy and paste third party material without providing a link. – Garth

#139 IHCTD9 on 04.11.22 at 1:55 pm

#126 Sail Away on 04.11.22 at 10:10 am

Of course, a perfect moneymaking vehicle like this won’t squandered on a house purchase, though. That would be silly.
———

Not sure on that one. The only way you get the double dip tax home run on the fhsa plan, is to buy a house. If not (based on my understanding of how it reads right now), it’s just an RRSP. So buy a house “change jobs” or “get divorced”, or do 366 days, then sell, thereby bringing the cash cow home to roost in da bank account sans le tax.

Realistically, established secure home owning Canucks will not bother with all this, but you know plenty of others will (wealthy renters).

#140 IHCTD9 on 04.11.22 at 1:58 pm

#125 Quintilian on 04.11.22 at 9:48 am

Question for the masterminds :

New Zealand, Canada, Australia, Austria, Sweden, Norway, Denmark, UK, Spain, France are the worst in the world.

What do they have in common?

Hint:
Trudeau is not the answer.
——-

I love the sound of Trudeau apologists in the morning…

#141 WTF on 04.11.22 at 2:07 pm

There a HOC hearing regarding Inflation. Methinks Stats Can is dropping the ball and their “data” is incomplete. That’s all I’m allowed to say, for a perfectly legitimate, albeit frustrating reason :-)

https://www.ourcommons.ca/Committees/en/FINA/Meetings

#142 Quintilian on 04.11.22 at 2:27 pm

No real response from #140 IHCTD9 on 04.11.22 at 1:58 pm and #132 crowdedelevatorfartz on 04.11.22 at 11:44 am

Here is my working theory, as I said before, I don’t mind teaching.

It is the cultural composition of the countries.

There is a belief, within the population of greater fools, buried deeper than their limbic system, that one’s self-worth is tied to property ownership.

This usually happens during Axonal transport; the message seeps through from the synaptic transmission of the cerebral cortex into the lower brain basal functions, and becomes coupled with the amygdala. Hence the emotional response, and why as Garth puts it “hormonal”

What is your theory?

#143 Philco on 04.11.22 at 2:34 pm

Here it is. As Garth has been saying up up and away with rates.
At a 2.5% increase over the next year that’s a lot extra dough to keep your debt rolling.
Sorry its a mile long I was unable to edit it.

https://mcusercontent.com/a152ad481776c9b69bf6edefa/files/5f7b0c6a-1a38-3ef2-d92e-ed81e6b6b9f5/BT_Global_Growth_Monthly_Report_MAR2022.pdf?utm_source=BT+Global&utm_campaign=9cb90dbad3-march-2020_COPY_01&utm_medium=email&utm_term=0_05ab1a4567-9cb90dbad3-529807865

#144 Sail Away on 04.11.22 at 2:36 pm

#139 IHCTD9 on 04.11.22 at 1:55 pm
#126 Sail Away on 04.11.22 at 10:10 am

Of course, a perfect moneymaking vehicle like this won’t squandered on a house purchase, though. That would be silly.

———

Not sure on that one. The only way you get the double dip tax home run on the fhsa plan, is to buy a house. If not (based on my understanding of how it reads right now), it’s just an RRSP. So buy a house “change jobs” or “get divorced”, or do 366 days, then sell, thereby bringing the cash cow home to roost in da bank account sans le tax.

———

Yes, true.

However, I’m looking at the ability to roll it directly into an RRSP at the end of the time, without having any effect on RRSP room, so greatly increasing RRSP…

…and then taking essentially tax-free distributions from a properly-prepared RRSP as tax residents of the US. So still tax-free in, tax-free out.

This super beneficial tax-avoidance hack requires dual citizenship, which our kids have. Conceivably, a dual citizen could accumulate a large RRSP, add the FHSA, move to the US for a few years and remove the entire amount tax-free, then return to Canada if desired. It’s an option.

#145 Sail Away on 04.11.22 at 2:45 pm

#142 Quintilian on 04.11.22 at 2:27 pm

Here is my working theory, as I said before, I don’t mind teaching.

There is a belief, within the population of greater fools, buried deeper than their limbic system, that one’s self-worth is tied to property ownership.

This usually happens during Axonal transport; the message seeps through from the synaptic transmission of the cerebral cortex into the lower brain basal functions, and becomes coupled with the amygdala. Hence the emotional response, and why as Garth puts it “hormonal”

What is your theory?

——–

Sure, not a bad theory. I’d suggest a number of things could be substituted for ‘property ownership’, though.

My personal self-worth is inextricably tied to oodles and caboodles of filthy lucre. Nothing makes my amygdala more orgasmic than backstroking through the money bin.

#146 Crystal ball futurist on 04.11.22 at 2:47 pm

Don’t try to fight the system. Use it to your advantage.

Me and wifey will now shelter 80k from our margin account tax free for the next 15 years while reducing our tax burden by 35k while doing that. What’s not to like about that.

Thanks Garth for spelling out the rules.

Thank our kings J&J for their benevolence.

You cannot shelter $40,000 each until five years from now, given contribution limits. Also the funds will be taxable unless used to buy real estate. – Garth

#147 Linda on 04.11.22 at 4:10 pm

#19 ‘Stone’ – as per an earlier blog post, you can roll the FHSA $ into your RRSP if you don’t use it to buy RE. The roll over doesn’t trigger taxation, but withdrawal does.

#30 ‘Lee’ – as per an earlier blog post, the answer is ‘No’. Your FHSA contributions are separate from your RRSP contribution, so one doesn’t affect the other. Also note my reply to Stone regarding the neat little gift of being able to roll over your FHSA into your RRSP – without, apparently, any risk to your RRSP contribution room whatsoever & without having to pay tax to boot. Don’t forget you could also make a ‘contribution in kind’ from your RRSP into your FHSA, claim the tax credit for doing so AND still get to roll those dollars back into your RRSP later on if you don’t buy RE within the 15 year time frame. This FHSA is one sweet deal for those who qualify to open one & for sure the upper income earners will be most likely to get the full benefit. Ka-ching!

#148 Søren Angst on 04.11.22 at 7:21 pm

To Russia with 💘.