The First Home Savings Account, which the Trudeau government launched on April 1, is a terrible idea. Let us count the ways.
I’m in a position to benefit from the Trudeau government’s vote buying, and you may be, too. As for everyone else? You’re going to pay for our tax break.at the start of April, though so far only one financial institution – Questrade – is set up to offer the accounts. But the big banks and online brokerages are expected to add the FHSA to their menus in the coming months.
Combining all these features breaks a tax policy taboo, which is that a savings program such as this should offer tax deferral, but not tax elimination. Money goes into an RRSP tax-free but gets taxed coming out; TFSAs do the reverse. But the FHSA escapes taxation at both ends. A renter in Toronto who earns $150,000 and contributes $8,000 to an FHSA would get an income tax refund ofMost lower-income people don’t have $8,000 sitting around, but one group with little to no income could be big winners. I’m talking about the children of well-off families.