The First Home Savings Account (FHSA) is a registered savings plan introduced by the Canadian government in 2022 to help first-time homebuyers save for their first home purchase. It combines features of the Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA), offering unique tax advantages to help you build your down payment.

 

Key Tax Benefits of FHSA

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• Tax-Deductible Contributions: Contributions reduce your taxable income for the year, similar to an RRSP.

• Tax-Free Growth: Earnings within the account, such as interest, dividends, and capital gains, are not subject to tax.

• Tax-Free Withdrawals: Funds withdrawn to purchase a qualifying home are completely tax-free, similar to a TFSA.

 

Eligibility Requirements

 

To open an FHSA, you must:

• Be a Canadian resident.

• Be at least 18 years old (or the age of majority in your province).

• Be a first-time homebuyer, meaning you have not owned a home you lived in during the current year or the past four years.