First Home Savings Account: Who Qualifies and What You Get
Learn how to save for your first home with tax-deductible contributions and tax-free withdrawals through this savings account.
The First Home Savings Account is a way for people to save money for their first home while receiving specific tax advantages.
Who it's for
This account is available to first-time homebuyers who are between the ages of 18 and 71.
What you get
When you put money into this account, your contributions can be used to reduce your taxable income. When you eventually withdraw the money to purchase your first home, those withdrawals are tax-free.
What it costs you
There is a limit to how much you can save using this method. You can contribute up to a lifetime maximum of $40,000.
The catch to know
If you decide not to buy a home, you cannot simply take the money out tax-free. Instead, the funds must be transferred to a Registered Retirement Savings Plan (RRSP) to avoid tax penalties.
How to apply
- Confirm you meet the age and homeownership requirements.
- Open an account through a qualifying financial institution.
- Make your contributions toward your savings goal.
- Visit the official portal to learn more: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html