What is the FHSA?
The First Home Savings Account (FHSA) is a new type of registered plan that’s designed to help you save for your first home, tax-free. Your contributions will be tax-deductible, like a registered retirement savings plan (RRSP). Your qualifying withdrawals will be non-taxable, like a tax-free savings account (TFSA).
Why should I consider opening an FHSA?
Get tax benefits - Your FHSA contributions can reduce your taxable income.
Grow your savings, tax-free - Any investment income in your FHSA is non-taxable while it’s in your plan. Invest in mutual funds, savings accounts, stocks, ETFs and more.
Save for your first home, tax-free - Pay no taxes on your withdrawals when you use your FHSA towards the purchase of a qualifying home.
How do I qualify to open an FHSA?
You're a Canadian resident and you've reached the age of majority in your province or territory.
You're an eligible first-time homebuyer who hasn’t lived in a qualifying home in the current or past 4 calendar years.
How can I withdraw my FHSA savings tax-free?
You're a Canadian resident and a first-time homebuyer at the time of the withdrawal.
You have an agreement to buy or build a qualifying home.
You intend to occupy the home as your principal residence within 1 year of acquiring the home.
How much can I contribute and withdraw from the FHSA?
Make the most of your FHSA by contributing regularly and growing your savings. Here's an overview of the rules for contributing and withdrawing funds from your FHSA, as outlined by the Government of Canada.
$8,000 annual contribution limit
Your annual limit includes any transfers you make from an RRSP. You can carry forward unused portions of your annual contribution limit in any year up to a maximum of $8,000.
$40,000 lifetime contribution limit
You must use your FHSA contributions within 15 years of opening the account, or by the time you turn 71 years old, whichever is sooner. After that time, you can transfer savings into an RRSP or RRIF or make a taxable withdrawal.
No limit for qualifying withdrawals
If you qualify to use your savings towards the purchase of a qualifying home, you can withdraw money from your FHSA, tax-free. For the same home purchase, you may also be able to withdraw money from your RRSP Home Buyers' Plan.