What is a First Home Savings Account (FHSA)?
The FHSA is a tax-free savings account designed to help Canadians save for their first home. Combining the benefits of an RRSP and a TFSA, it offers a tax deduction to reduce your annual taxable income while allowing your savings to grow tax-free.
When it’s time to purchase your first home, you can withdraw funds from your FHSA without paying taxes or the need to repay the amounts withdrawn.
Eligibility Criteria
To open an FHSA, you must meet the following requirements:
- Be a Canadian resident.
- Be of legal age in your province of residence.
- Be under the age of 71 as of December 31 of the current year.
- Not have owned a qualifying home in Canada as your principal residence in the calendar year before opening the FHSA or in the four preceding years.
Contribution Limits
- Lifetime contribution limit: $40,000.
- Unused contribution room can be carried forward, allowing a maximum contribution of $16,000 in a single year.
Tip: Contributions to an FHSA reduce your taxable income, potentially resulting in a tax refund.
Contribution Deadline
The FHSA contribution deadline is December 31 of each year.
Investment Options for Your TFSA
Segregated Funds
Combine the benefits of mutual funds with protection against market downturns..Guaranteed Interest Funds
Enjoy fixed returns and 100% capital protection.High-Interest Savings Accounts
Save risk-free and earn competitive interest rates.Daily Interest Funds
Earn daily interest, paid monthly, to grow your investments steadily