10/03/2023
First Home Savings Account (FHSA)
Launched in April 2023 by the Federal Government, the FHSA is a new type of registered savings plan to
help Canadians save towards their first home by allowing account holders to contribute up to $40,000
over the lifetime of the plan.
To qualify for an FHSA, you must:
• Be a resident of Canada and have a social insurance number.
• Be at least 18 years of age or the age of majority in your province of residence.
• Be under 71 years of age (same age limit as an RRSP).
• Not have lived in a qualifying home in Canada that you and/or your spouse owned at any time in the
calendar year that the account is opened or at any time in the preceding four calendar years.
Benefits of an FHSA:
• Individuals can deduct the contributions from your annual taxable income, like a Registered
Retirement Savings Plan (RRSP) that are capped at $8,000 a year, up to a lifetime contribution limit
of $40,000. Unused contribution room can carry forward to the following year up to a maximum of
$8,000.
• Generate tax-free returns, as with Tax-Free Savings Accounts (TFSAs) and RRSPs.
• This is a perfect vehicle to allow young people, serious about getting into the real estate market, to
build a substantial down payment over the next few years. Parents and Grandparents are also
interested, especially if they are able to help financially.
• The account can stay open for 15 years or until the end of the year you turn 71, or at the end of the
year following the year in which you make a qualifying withdrawal from an FHSA for the first home
purchase, whichever comes first. You must also intend to occupy the qualifying home as your
principal place of residence within one year of buying or building it.
• Any savings not used to purchase a qualifying home could be transferred to an RRSP or RRIF on a
non-taxable transfer basis without affecting your RRSP limits.
• Withdrawals made from an FHSA in order to purchase a first qualifying home (as defined in the
regulations) are not taxable. This includes, if applicable, the returns generated through an FHSA,
which could allow you to increase your down payment. So, you get a deduction going in and tax-free
income coming out.
Talk to us about how we can help you get into your first home. And Parents and Grandparents, let us
show you how to help your children or grandchildren move out of your basement, or away from
expensive rentals, into a home of their own.It can help you
establish what one needs for a down payment based on what one can afford for a home
