The Tax-Free First Home Savings Account

A better, brighter, tax-free way to save for a home. 

Open yours today!
Buying a home can be a challenge for many first-time home buyers, but a new registered account is aiming to help Canadians save towards their first home.

In its 2022 Federal Budget, the Canadian Government introduced the Tax-Free First Home Savings Account (FHSA), a new registered savings plan designed to help Canadians save for their first home.

Home ownership just got closer.

Spark Immediate Tax Savings

Like with an RRSP, your annual FHSA contributions can be claimed as an income tax deduction for contributions made in that year. This means you can save big on taxes!

Keep More, Save More

Earnings in your plan are tax-free! Income earned in an FHSA is not included in your annual income for tax purposes. This means income and capital gains can continue to grow and compound in the FHSA on a tax-free basis.

Even withdrawals are tax-free!

Did we mention tax-free? Even qualifying withdrawals to buy a home are tax-free. Tax-free withdrawals mean a bigger down-payment and a smaller mortgage saving you big dollars!

Boost Returns with Flexible Investment Choice

From term deposits to mutual funds* to stocks and bonds*, we'll help you build an investment strategy tailored to your goals and risk profile.
Own your little corner of the world sooner
Start today! Find out if a FHSA is right for you, your financial situation and your goals. 

THE NITTY-GRITTY: everything you need to know about FHSAs

You can open an FHSA if you are:
  • a Canadian resident
  • at least 18 years old
  • a first-time homebuyer*
*You are considered a first-time homebuyer if you or your spouse/common-law partner did not own the home that you lived in in the year you open an FHSA or the preceding four calendar years.
You are allowed to contribute up to $40,000 over your lifetime to an FHSA and up to $8,000 in any calendar year.

Like with an RRSP, your annual FHSA contributions can be claimed as an income tax deduction for contributions made in that year. However, unlike an RRSP, your FHSA contributions made during the first 60 days of the calendar year cannot be used for tax deductions for the previous year. Unused contribution room can carry forward to the following year up to a maximum of $8,000.

Just like with other registered plans, you can have more than one FHSA, but the total combined amount you can contribute to all your accounts cannot exceed your annual and lifetime FHSA contribution limits.

Like TFSAs and RRSPs, a tax on overcontributions to an FHSA would apply for each month (or part-month) that the account is over the limit. The tax applies at the rate of 1% of the highest amount of the excess that existed in that month.
If you use your FHSA savings to buy a home, a withdrawal from your FHSA will not be taxable. To qualify, your withdrawal must meet the following conditions:
  • You must be a first-time homebuyer
  • You must be a Canadian resident
  • You must have a written agreement to buy or build a qualifying home (located in Canada) before October 1 of the year following the year of withdrawal
  • Your new home must be your principal place of residence within one year of buying/building it
  • Once you’ve made a non-taxable withdrawal from your FHSA to purchase a home, you must close your FHSA within a year from that date, and would not be eligible to open another FHSA.
You must use the funds in your FHSA to purchase a first home within 15 years of opening the plan, or by the end of the year you turn 71.

Funds left over after making a qualifying withdrawal can be transferred to another FHSA or RRSP or registered retirement income fund (RRIF), on a tax-free basis, before the end of the year following the year that first qualifying withdrawal is made. Transfers do not reduce or limit your available RRSP contribution room. Once transferred, the funds are subject to the rules of the applicable accounts, including that the funds will be taxable when you withdraw them from the account.

Withdrawals and transfers do not replenish FHSA contribution limits.
If you take funds from your FHSA as a non-qualifying withdrawal, you must include the amount in income for the year of the withdrawal and tax will be withheld (much like a withdrawal from your RRSP).
You must use the funds in your FHSA to purchase a first home within 15 years of opening the plan, or by the end of the year you turn 71.

If you don't use your FHSA to buy a home, you can transfer the funds to an RRSP or RRIF account. The transfer would not impact your RRSP’s available contribution room.

You can also simply withdraw the funds from your FHSA, but the amount would be subject to withholding tax and be included as income on your tax return.

FHSA withdrawals and withdrawals under the HBP can be made for the same qualifying home purchase.

HBP withdrawals are borrowed from your RRSP (interest-free) and must be paid back within 15 years, whereas qualifying FHSA withdrawals are tax-free and do not need to be repaid.

If you do not buy a home within the 15-year FHSA limit, the funds can be transferred to your RRSP tax-free before the end of the 15th year, where they can later be withdrawn under the HBP.

Because a transfer of funds from an FHSA to an RRSP will not reduce your available RRSP contribution room, you can effectively create more RRSP room by starting to contribute to your FHSA.

Qualifying investments are similar to those held by RRSPs and TFSAs and include mutual funds, exchange-traded funds (ETFs), publicly traded securities, government and corporate bonds and guaranteed investment certificates (GICs).

The same prohibited investment rules and non-qualified investment rules applicable to other registered accounts will apply to the FHSA. These rules disallow non-arm’s length investments and investments in assets such as land, shares of private corporations and general partnership units.
The FHSA must be closed by December 31 of the year you turn age 71, by December 31 of the 15th anniversary of first opening the account if the funds have not been used to purchase a qualifying home, or by December 31 of the year following the year of the qualifying withdrawal.

Unused funds in the FHSA can be transferred to an RRSP or RRIF on a tax-free basis before the FHSA closure or withdrawn, but the withdrawal will be taxable.

If a withdrawal was made to purchase a qualifying home, unused funds can be transferred to an RRSP or RRIF on a tax-free basis until December 31 of the year following the year of the qualifying withdrawal.
Only the FHSA holder can claim a deduction for contributions made to their own FHSA. You cannot contribute to your spouse’s and claim a deduction; however, you can gift funds to your spouse so that they can claim a deduction on their own FHSA contribution. Normally, if you gift funds to your spouse, attribution rules apply so all income earned and capital gains realized on those funds will be attributed back to you and taxed in your hands, but an exception applies to the FHSA that attribution rules will not apply to income earned and capital gains generated within an FHSA derived from these contributions. When the spouse withdraws amounts from the FHSA, only the spouse will need to include the amounts withdrawn in income. No portion of your gifted funds to your spouse’s FHSA would be attributed back to you. Similarly, no attribution arises if you give cash to an adult child to contribute to their FHSA.

In the event of a marriage or common-law breakdown, you may transfer funds from your FHSA to your former spouse’s FHSA, RRSP or RRIF. This will not reinstate an FHSA contribution room for you and would not use any contribution room of your former spouse. If your spouse has overcontributed, the amount eligible for transfer will be reduced.
You may designate your spouse as a successor account holder. The surviving spouse would become the new holder immediately on death, so long as they meet the eligibility criteria to open an FHSA. Inheriting an FHSA in this way would not impact their contribution limits and would assume the surviving spouse’s closure deadlines. If the surviving spouse is not eligible to open an FHSA, amounts can be transferred on a tax-deferred basis to their RRSP or RRIF or withdrawn on a taxable basis.

If the beneficiary is anyone other than a spouse, the funds will need to be withdrawn immediately following death and paid to the beneficiary. Amounts paid will be included in the beneficiary’s income and subject to withholding tax.
You can continue to make contributions to your existing FHSA after moving from Canada but will not be able to make a qualifying withdrawal as a non-resident. To make a qualifying withdrawal, you must be a resident of Canada at the time of the withdrawal and up until the time the home is bought or built.

Non-qualifying withdrawals as a non-resident are subject to withholding tax.

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