Unlock Your Path to a New Home with an FHSA

Save up to $40,000 towards your first home.

Why Choose the FHSA

🍁 The FHSA is a registered savings plan designed to help first-time home buyers in Canada save up to $40,000 towards the purchase of their first home. This unique account combines the benefits of an RRSP (tax-deductible contributions) and a TFSA (tax-free withdrawals) to provide maximum financial flexibility and growth.

You can open an FHSA if you meet the following criteria

Age Requirement

You are at least 18 years old and not older than 71

Residency

You are a Canadian resident

First-Time Buyer

No Principal Residence in the current or past four calendar years.

How Much Can You Contribute?

Annual Limit: Contribute up to $8,000 per year.

Lifetime Limit: The maximum contribution limit is $40,000.

Carry-Forward Options: If you don’t use your entire $8,000 contribution room in one year, you can carry it forward to the next year, up to a maximum of $8,000.

Boost Your Savings with Other Programs

Combine the FHSA with the Home Buyers’ Plan (HBP) to maximize your down payment. The HBP allows you to withdraw up to $35,000 from your RRSP tax-free to purchase a home.

By using both the FHSA and HBP, you can significantly increase the funds available for your first home.

Contact with us for any advice

Phone

+1 (416) 455 4040

What is the FHSA?

The FHSA is a registered savings plan that allows eligible Canadians to save up to $40,000 for their first home. It combines the tax benefits of a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA), offering tax-deductible contributions and tax-free withdrawals for qualifying home purchases.

Who is eligible to open an FHSA?

To open an FHSA, you must be a Canadian resident aged 18 or older (or the age of majority in your province) and a first-time homebuyer. A first-time homebuyer is defined as someone who has not owned a home that they lived in as a principal residence in the current year or any of the four preceding calendar years.

What are the contribution limits for the FHSA?

You can contribute up to $8,000 per year to an FHSA, with a lifetime maximum contribution limit of $40,000. If you contribute less than $8,000 in a given year, the unused contribution room (up to $8,000) can be carried forward to the next year, allowing for a maximum annual contribution of $16,000 in such cases.

What types of investments can I hold in an FHSA?

Similar to a TFSA, an FHSA can hold a variety of qualified investments, including publicly traded stocks, exchange-traded funds (ETFs), bonds, and mutual funds. The prohibited investment and non-qualifying investment rules applicable to other registered plans also apply to FHSAs.

Can I use both the FHSA and the Home Buyers' Plan (HBP) to purchase my first home?

Yes, eligible individuals can combine funds from both the FHSA and the HBP for the same qualifying home purchase. This strategy can help maximize the amount available for a down payment. Unlike HBP withdrawals, funds withdrawn from an FHSA do not need to be repaid.

What happens if I don't use the funds in my FHSA to purchase a home?

If you choose not to buy a home, you can transfer the funds from your FHSA to an RRSP or a Registered Retirement Income Fund (RRIF) on a tax-free basis. These transfers do not affect your existing RRSP contribution room. However, withdrawals from the RRSP or RRIF will be subject to tax upon withdrawal, based on the rules of those account types.

Are contributions to an FHSA tax-deductible?

Yes, contributions to an FHSA are tax-deductible, similar to RRSP contributions. You can choose to deduct your contributions in the year they are made or carry forward the deduction to a future year, which may be beneficial if you expect to be in a higher tax bracket later.

Is there a deadline for closing my FHSA?

An FHSA must be closed by December 31 of the year in which the earliest of the following events occurs:

The 15th anniversary of opening the account.
The account holder turns 71 years old.
The end of the year following the first qualifying withdrawal from the FHSA.

If the funds are not used to purchase a qualifying home by these deadlines, they can be transferred to an RRSP or RRIF without affecting existing contribution room, or withdrawn on a taxable basis.