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If we judge by reader questions, the new tax-free First Home Savings Account is generating a lot of interest from people who want to get into the housing market.

Banks and investment companies have been slow to introduce FHSAs, as noted by my colleague Salmaan Farooqui in a recent Globe and Mail story. But the flow of reader questions since the April 1 launch of FHSAs suggests there’s quite a bit of interest in them.

Here’s a quick guide to FHSAs that I wrote on their launch. To quickly summarize, they combine the best of tax-free savings accounts and registered retirement savings plans in a way that results in a very appealing way to save for a home down payment for people 18 and older. You get a tax deduction on your contributions, as with the RRSP, and you get the TFSA’s tax-free withdrawals when using the account to buy a home. As with both RRSPs and TFSAs, investment gains earned in an FHSA are tax-sheltered.

One of the specific questions from readers about these new accounts concerns married and common-law couples. Can they each have their own FHSA to use on a house they buy together?

The answer is yes. As long as both partners are first-time buyers, they can each contribute to their own FHSA and use it to buy the same home. This is significant because the maximum contribution to FHSAs is $8,000 a year to a lifetime ceiling of $40,000. Multiplied by two, these accounts become much more of a factor in building a down payment.

Spousal FHSAs are not available, so one spouse cannot directly contribute to a partner’s account. However, a spouse can give money to a partner for use as an FHSA contribution with no tax consequences for the giver.


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Rob’s personal finance reading list

When the invitation says ‘no gifts’

How to navigate those situations when an invitation to a wedding, milestone birthday or shower says “no gifts.” Do buy a gift anyway?

Bye bye, adviser

A Reddit discussion on moving your investment account from an adviser to a much cheaper robo-adviser. A pro tip covered here: Ask your robo-adviser to cover any transfer-out fees from your current advisory firm.

Would you sacrifice returns to invest ethically?

A survey of more than 1,000 people finds that 70 per cent are willing to make a lower return if investing in a company that produces tangible social good. I’m not sure you have to sacrifice returns if you invest in companies that score well on an ESG basis – environmental, social and governance factors.

She’s 67 and moving in with three strangers

Meet Katherine Goodes. She’s 67 and moving in with three strangers so she can get her monthly rental costs down to more affordable levels. This is such a common problem that a Facebook group has been created to link up senior women who want to share housing to keep costs manageable.


Ask Rob

Q: I just read your column on RRIF withdrawals. It mentions using an in-kind withdrawal. I have been told twice by my financial advisor that I could not do that and I had to convert to cash before making the withdrawal. Have I been given misinformation?

A: Here’s the lowdown from the Ontario Securities Commission’s Get Smarter About Money website: “If you don’t need the income from your RRIF right away, you don’t have to take your minimum withdrawal amount in cash. Instead, you may be able to transfer the investments directly to a non-registered account or TFSA (provided you have contribution room remaining in that year). This is known as an ‘in kind’ withdrawal.”

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.


Today’s financial tool

A helpful guide to getting started as an ETF investor, including some funds to look at.


The money-free zone

Crunchy psychedelics from Italy: Dark Love by the New Candys. For an Icelandic spin, try Dead Mantra by Dead Skeletons.


From the Twitterverse

Why do so many people who have investment advisers also have DIY online brokerage accounts?


In case you missed these Globe and Mail personal finance-related stories
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  • Agency says car insurance in some Ontario cities has spiked since 2021, may keep climbing

More Rob Carrick and money coverage

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