FHSA (First Home Savings Account)

The FHSA, or First Home Savings Account, is a tax-free savings plan in Canada. It helps people save for their first home by combining features of RRSP and TFSA. With this, you get a deduction to lower your taxable income and enjoy tax-free returns. When you’re ready to buy your first home, you can withdraw the money without paying taxes, and there’s no need to repay what you take out. It’s a simple and tax-efficient way to save for your dream home.

Contribution Room

You can contribute up to $8,000 per year to your First home SA, for a maximum of $40,000 during your lifetime.

You can also carry forward up to $8,000 of unused contribution room from one year to the next, for a maximum annual contribution of $16,000.

Key advantages of the FHSA Canada

1. Healthcare Gaps and Expenses

• As with an RRSP, your FHSA Canada contributions reduce your annual taxable income.
• Your savings and returns generated in the FHSA Canada are tax free upon withdrawal.
• Unlike RRSP withdrawals under the Home Buyers’ Plan (HBP), sums withdrawn from an FHSA Canada for the purchase of a first home do not have to be repaid.
• You can carry forward up to $8,000 of unused contribution room, for a maximum annual contribution of $16,000.
• You can transfer funds from your First home SA to your RRSP or your RRIF if you are not using them

 You can open an First Home Savings Account if you are:

• A Canadian resident
• Between 18 and 71 years old
• A first-time homebuyer
• You must not have owned the residence you lived in during the year you open the First home savings account or the four calendar years leading up to it, either individually or with your spouse/common-law partner.
• You must use the funds in your First home savings account to purchase a first home within 15 years of opening the plan, or by the end of the year you turn 71.