A First Home Savings Account lets you save, invest, and grow your down payment tax-free

How does a First Home Savings Account work?
  • Canadian residents aged 18 - 71 who do not own their home currently, and have not owned their own home in the past four calendar years, are eligible to open a FHSA. 
  • Income and capital gains earned in an FHSA are not taxable and can grow on a tax-free basis. There are no taxes owed on qualifying withdrawals. 
  • There is an annual contribution limit of $8000/year, with a lifetime contribution limit of $40,000. Contributions are tax-deductible.
  • You can hold your FHSA for a maximum of 15 years.
Ready to open an FHSA?

What can go in a FHSA?

  • Guaranteed Investment Certificates (GICs)

What is a qualifying withdrawal?

  • The home must be located in Canada.
  • You must have a written agreement in place to buy or build by October 1st of the year after withdrawing.
  • You must intend to live in the home as your principal residence within a year of buying or building.
  • You must be a Canadian resident from the time of withdrawal to the acquisition of the home, and a first-time home buyer when you withdraw.

What if I don't use my FHSA?

  • Unused funds in your FHSA can be transferred to an RRSP or RRIF on a tax-free basis before the FHSA closure.
  • Any unused funds not transferred before closure would have to be withdrawn on a taxable basis.
How does an FHSA compare to an RRSP or TFSA?
There are complexities to all these accounts. Always consider what's best for your situation. 

RRSP Home Buyers' Plan

  • Contributions: deductible
  • Investment growth: tax-deferred
  • Withdrawals: tax-deferred

Tax Free Savings Account

  • Contributions: not deductible
  • Investment growth: tax-free
  • Withdrawals: tax-free

First Home Savings Account

  • Contributions: deductible
  • Investment growth: tax-free
  • Withdrawals: tax-free
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