What is an FHSA?

An FHSA is a tax-free savings account designed to help future homeowners save for the purchase of a qualifying first home in Canada.

Combining the advantages of an RRSP and a TFSA, the FHSA gives you a deduction that reduces your annual taxable income and allows you to generate tax-free returns. You can then use the accumulated funds to finance the purchase of a first home without having to pay taxes on withdrawals, and without having to repay the amounts withdrawn from the FHSA.

• Eligibility criteria
  • Must be a Canadian resident.
  • Must be of legal age in your province of residence.
  • Must be under 71 years of age as of December 31 of the current year.
  • Must not have lived in a qualifying home in Canada that you or your spouse owned during the part of the calendar year preceding the opening of the FHSA or during the preceding four calendar years.

• Contribution deadline
  The FHSA contribution deadline is December 31 of each year. Unlike with the RRSP, you cannot contribute to your FHSA until the following March 1.

• Contribution room
  You can contribute up to $8,000 per year to your FHSA, for a maximum of $40,000 during your lifetime.
  You can also carry forward up to $8,000 of unused contribution room from one year to the next, for a maximum annual contribution of $16,000.