Tax-Free First Home Savings Account (FHSA)

Starting April 1, 2023, first-time homebuyers will have a new savings tool to assist with saving for a down payment for their first home. The First Home Savings Account (FHSA) will offer prospective first-time home buyers with the ability to save up to $40,000 tax-free.

Stipulations:

  • Must be a first-time home buyer.

  • Must be at least 18 years old.

  • Must be a Canadian resident.

  • You or your spouse must not have owned a primary residence within 4 years.

  • You must occupy the home for at least 1 year following the purchase and withdrawal.

Contributions:

  • Maximum of $40,000 lifetime deposits.

  • Maximum of $8,000 annually.

  • You can contribute but defer the tax deduction until a year later.

  • Carry forward ability of up to $8,000 to use for the following year.

  • Funds leftover after the withdrawal to be transferred into an RSP.

Withdrawals:

  • Not taxable

  • Must have an offer to purchase to buy or build by October 1 of the year following the withdrawal.

  • Can be made within 30 days of a qualifying home purchase.

  • You can transfer from an RSP to the FHSA.

  • You do not have to repay within 15 years like the Homebuyers Plan (RRSP Withdrawal).

*The FHSA can be used in conjunction with the Homebuyers Plan (HBP) for a maximum housing contribution of $75,000.

MMG