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First Home Savings Account (FHSA)

The FHSA is a registered plan designed to help individuals save for the purchase of their first home on a tax-free basis. The FHSA combines some of the features of a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA). Like an RRSP, contributions will generally be tax-deductible. Like a tax-free savings account (TFSA), withdrawals to purchase a qualifying home will be non-taxable
  • 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 account.
  • 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.
  • Any Canadian resident that has reached the age of majority in your province or territory (18- years of age in Manitoba)
  • You're an eligible first-time homebuyer who has yet to live in a home you, your spouse, or your common-law partner has owned in the current or past four calendar years
  • The cap on annual contributions is $8,000 annually up to a $40,000 lifetime contribution limit.
  • Contribute tax-free for up to 15 years.
  • Individuals may claim an income tax deduction for FHSA contributions made in the calendar year or a previous year to the extent not previously deducted.
  • Pay no taxes on any investment earnings.
  • Carry forward a maximum of $8,000 in unused contribution room to the following year.
  • Your contribution room will be tracked by the CRA and you can view your contribution room on your MyCRA account, or on your notice of assessment that you receive from the CRA.
  • You can do a tax-free transfer of funds from an RRSP to your first home savings account, this would just be subject to annual and lifetime contribution limits.
  • You're a Canadian resident and a first-time homebuyer at the withdrawal time.
  • You have an agreement to buy or build a qualifying home.
  • You intend to occupy the home as your principal residence within one year of acquiring the home.
  • If no home is purchased, funds can be withdrawn but would be considered taxable income. You could also transfer the funds to an RRSP to remain tax sheltered.
  • Your first home savings account must be closed once one of the following occurs:
    • By December 31 of the 15th year after opening your FHSA
    • By December 31 of the year the account holder turns 71 years old
    • By December 31 of the year following the first qualifying withdrawal from the FHSA
Make the most of your FHSA by contributing regularly and growing your savings. 

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