Maximizing year-end tax and retirement strategies: Insights from Jacqueline Power - December 3, 2025

Leveraging the first home savings account (FHSA) and home buyer’s plan (HBP)

The FHSA, introduced in 2023, allows eligible first-time homebuyers aged 18 and over to contribute up to $8,000 annually with a lifetime limit of $40,000. Contributions are tax-deductible, and unused deductions can be carried forward indefinitely. The Home Buyer’s Plan permits withdrawals of up to $60,000 from RRSPs for first-time home purchases, with an extended repayment period for purchases made between January 1, 2022, and December 31, 2025, delaying repayments by three years. Unlike the HBP, FHSA withdrawals do not require repayment. When opening an FHSA, clients should consider their home purchase timeline, as the account can only remain open for 15 years.

Simplified reporting and compliance for bare trusts

Bare trusts, where the legal owner differs from the beneficial owner (common in family arrangements such as parents setting up accounts for children), have evolving reporting requirements. Recent changes exempt trusts with assets of $50,000 or less from reporting. For trusts where individuals are related, the exemption threshold is $250,000. Additionally, principal residences held in such trusts by related individuals are exempt from reporting. These updates reduce administrative burdens and clarify reporting obligations for many small trusts.

Strategic tax loss harvesting and foreign property reporting

Tax loss harvesting remains a valuable strategy to offset gains. Losses can be applied in the year realized, carried back up to three years, or carried forward indefinitely. However, superficial loss rules require waiting 30 days before repurchasing identical securities to maintain eligibility. Investors holding foreign property with a cost exceeding $100,000 must file Form T1135. Simplified reporting applies for holdings between $100,000 and $250,000. Canadian mutual funds are exempt unless they are U.S.-based.

Building intergenerational wealth and awareness

Engaging younger generations early is important, as many may be unaware of programs like the FHSA and HBP. The Tax-Free Savings Account (TFSA) remains a key vehicle for savings, with cumulative contribution room reaching $102,000 for those eligible since 2009. TFSA withdrawals are tax-free and do not affect net income or Old Age Security (OAS) clawbacks, making it a valuable tool for both short- and long-term savings.

Charitable giving: year-end opportunities

Year-end is also a key time for charitable donations. To qualify for a tax credit, donations must be settled by December 31. For in-kind donations of securities (such as stocks, bonds, or mutual funds), the capital gains inclusion rate is zero, and donors receive a receipt for the full value.

Critical contribution deadlines for tax-advantaged accounts

Conclusion: Prioritize proactive year-end planning