As the cost of housing continues to rise, making the dream of homeownership seems distant for many Canadians, particularly newcomers and younger generations. The Government of Canada is taking significant steps to make housing more accessible, highlighting the newly introduced tax-free First Home Savings Account and the first category-based Express Entry invitation aimed at tradespeople, bolstering the homebuilding sector.
The new tax-free First Home Savings Account (FHSA) is a registered savings account that helps Canadians become first-time home buyers by contributing up to $8,000 per year (up to a lifetime limit of $40,000) for their first down payment within 15 years. To help Canadians reach their savings goals, First Home Savings Account contributions are tax deductible on annual income tax returns, like a Registered Retirement Savings Plan (RRSP). Like a Tax‑Free Savings Account, withdrawals to purchase a first home, including any investment income on contributions, are non-taxable. Tax-free in; tax-free out.
Launched on April 1, 2023, the First Home Savings Account is now available at 7 institutions, with more set to offer it soon.
While the First Home Savings Account addresses the affordability aspect, the government’s commitment to homebuilding extends beyond. As part of the efforts to bridge labour gaps and expedite home construction, the Government has expanded the pool of eligible candidates for permanent residence through Express Entry, specifically targeting individuals with experience in homebuilding occupations.
On August 3, 2023, the Government launched the first-ever category-based Express Entry draw tailored for tradespeople. Invitations were extended to 1,500 candidates proficient in trades occupations to apply for permanent residence in Canada.
With the introduction of the tax-free First Home Savings Account and the strategic Express Entry invitation, the Government of Canada is taking proactive measures to tackle the challenges of housing accessibility and workforce shortages in the homebuilding sector. These initiatives underscore the commitment to fostering a vibrant, thriving, and accessible housing market for all Canadians.