(Hint- it can be used for a home purchase and everyone can participate.)
The answer is a FHSA - First Home Savings Plan.
Don’t stop reading if you are not a first-time home buyer.
What is it? - it is a new type of account with the last Federal Budget that combines the features of a RRSP and TFSA. Funds contributed to a FHSA are tax deductible and qualified withdrawals are also tax-free.
What can I contribute? - any Canadian resident over the age of 18 is eligible to open a FHSA for the purpose of purchasing a home. The annual contribution limit is $8000 with a lifetime limit of $40000.
Who Qualifies? - anyone and their spouse/common-law partner is not living in a home owned in the year the account is opened, or the previous four years
What type of investments can it hold? - any investment that can be held in a RRSP or a TFSA can be held in a FHSA.
Can a parent contribute to their child’s FHSA? - Parents can’t contribute directly to their child’s FHSA. But they can GIFT the money to their children, who can then use it to contribute to their FHSA.
This is meant to solely provide an overview of a FHSA.
Contact your advisor to see how it fits into your financial plan or how to use it to assist your children.
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