Do you lose your CELIAPP if you don't buy a house?

The FHSA (First Home Savings Account - CELIAPP in french) is an investment tool that allows you to save money tax-free to buy your first home. This plan was set up to address the soaring price of homes in Canada.

Let's be clear, the FHSA is a very advantageous tool for those who have the opportunity to use it. Like an RRSP, payments into an FHSA account are deducted from your income, allowing you to benefit from a tax refund. All amounts placed in the FHSA grow tax-free.

You can contribute up to a maximum of $8,000 per year to your FHSA account. Unlike the TFSA, withdrawals from the FHSA account must be used to purchase a first home under certain rules and conditions. The maximum term of an FHSA is fifteen years after the date the account is opened. It must also be closed when you reach age 71.

But what happens if, after saving in your FHSA, you change your mind and no longer want to buy a house?

If you haven't bought a home in the meantime, you can transfer the amount from your FHSA directly to your RRSP or RRIF. This transfer, which is tax-free, will not affect your RRSP contribution room. Incredible, isn't it! Of course, once transferred to an RRSP, withdrawals will be taxed in the same way as the money that has grown in your RRSP.

You must also transfer your FHSA to a RRIF as soon as you reach age 71, or withdraw the amount from your FHSA. Again, this withdrawal will be taxable on the current year's income tax return.

In summary, the FHSA is an advantageous investment vehicle if you are planning to buy your first property. If this is your project, talk about it now with your real estate broker Gail Meili, real estate broker in Saint-Lazare and Hudson. She will help you see more clearly the steps and tools at your disposal to achieve your goal.