First Home Savings Account (FHSA): Who Qualifies and What You Get
Learn how to use the FHSA to save for your first home with tax-deductible contributions and tax-free withdrawals.
The First Home Savings Account (FHSA) is a registered savings plan designed to help you save money more efficiently to buy your first home.
Who it's for
This plan is available to first-time home buyers who are between the ages of 18 and 71.
What you get
The account offers two main tax advantages. First, the money you put into the account can be used to reduce your taxable income, meaning your contributions are tax-deductible. Second, when you withdraw the money to purchase your first home, those withdrawals are tax-free.
What it costs you
There is a limit on how much you can contribute to the account each year. You can deposit up to $8,000 annually.
The catch to know
If you decide not to buy a home, you are not stuck with the funds. You have the option to transfer your savings into a Registered Retirement Savings Plan (RRSP).
How to apply
- Open an FHSA through your chosen financial institution.
- Make contributions up to the annual limit.
- Save your receipts and documentation for your tax filings.
- Visit the official portal for more details: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html