First Home Savings Account (FHSA)

The First Home Savings Account (FHSA) is a federal government program that is designed for aspiring first-time home buyers. This savings a replacement for an RRSP or TFSA, but rather works in partnership with them in order to provide:

More contribution room
More tax savings
More opportunities for growth in your investments

Essentially, the FHSA account takes the best features of the RRSP and TFSA without any of the drawbacks. Any money that is withdrawn from the FHSA does not need to be repaid. Additionally, any money put into the FHSA can be deducted from your income. Pretty sweet!

ELIGIBILITY
- Current tax resident in Canada
- Between ages of 18 and 71
- You have not lived in a home owned by yourself or your partner in the current year or the past 4 calendar years
- Home must be purchased in Canada

CONTRIBUTIONS/DEDUCTIONS
- Annual contribution limit is $8,000 (any unused contributions can carry forward to a maximum carry forward amount of $8,000).
- Lifetime contribution amount is $40,000.
- Annual contributions can be deducted when you file taxes

RULES FOR USING FHSA
- The contributions to an FHSA can be used to invest in stocks, EFTs and more (similar to RRSPs and TFSAs)
- Contributions can continue to be maid until the lifetime contribution limit is reached, or for up to 15 years from opening of the account
- All investments grow tax free
- Money that is withdrawn is tax free


For more information on this program, please visit the Government of Canada website here.