What is an FHSA?
A First Home Savings Account (FHSA) is a registered savings plan designed to help you save for your first home. It combines the tax benefits of an RRSP with the tax-free eligible withdrawals of a TFSA. Contributions are tax-deductible, while eligible withdrawals for a qualifying first home are generally tax-free and don't need to be repaid.
You can contribute up to $8,000 per year, to a lifetime maximum of $40,000, to put toward the purchase of your first home. An FHSA can help you build your down payment while making the most of available tax benefits.
Why choose an FHSA?
Grow your savings
Your savings grow faster since earnings aren’t taxed.
Since your investment earnings aren't taxed, your savings will have the opportunity to grow faster in a FHSA than they would in other types of savings accounts.
Get tax benefits
Contributions are tax-deductible.
All contributions are tax-deductible, so investing in a FHSA can reduce your taxable income.
Flexible investments
Hold mutual funds and more, tailored to you.
Your FHSA can be held in a variety of qualified investments such as a mutual fund and more. We will work with you to find the right investment to match your needs.
How does it work?
To open an FHSA, you must be a Canadian resident, at least 18 years old, have a valid Social Insurance Number (SIN) and qualify as a first-time homebuyer. You can contribute up to $8,000 per year, to a lifetime maximum of $40,000. Your contribution room starts when you open your FHSA, and any unused room can be carried forward to future years. Eligible contributions are tax-deductible, except for transfers made from an RRSP.
When you’re ready to buy your first home, qualifying withdrawals from your FHSA can be made tax-free and do not need to be repaid. To qualify, you must meet the requirements for a first-time home purchase, including being a Canadian resident, having an agreement to buy or build a qualifying home and planning to use it as your principal residence.
If you withdraw funds for a purpose other than buying a qualifying first home, the amount withdrawn will generally be considered taxable income. Your FHSA must be used within 15 years of opening the account or by the end of the year you turn 71, whichever comes first.
Is this right for you?
Right for you if:
- You're planning to purchase your first home. FHSAs were specifically designed to help first-time home buyers achieve their home-ownership goals.
- You want to grow your savings faster. Since any earnings made on your investments aren't taxed, you'll see those balances grow more quickly – and who doesn't want that?
- You enjoy flexibility. With a FHSA, you can withdraw funds any time. You can also transfer funds from your FHSA to any RRSP or RRIF held in your name, tax-free!
May not be right for you if you:
- You've previously owned a home. FHSAs are not available to anyone who has owned a home at any time in the four years prior to applying for the account.
- You plan to purchase property outside of Canada. FHSA funds can only be used to purchase a home or housing unit located in Canada.
- You want to move funds from a TFSA or RRIF. While you can transfer funds from a RRSP to your FHSA, you cannot transfer funds from your TFSA or RRIF into your FHSA.
Tools to help you reach your goals.
Common questions.
Here’s what people ask us the most.
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To open an FHSA, you must be a Canadian resident, at least 18 years old, have a valid Social Insurance Number (SIN) and qualify as a first-time homebuyer.
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To open and use an FHSA, you must meet the government’s definition of a first-time homebuyer. Generally, this means you did not live in a qualifying home that you owned or jointly owned during the current calendar year or the previous four calendar years. You must also be a Canadian resident, at least 18 years old and have a valid Social Insurance Number (SIN).
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Yes. If you’re eligible, you can use both your FHSA and the Home Buyers’ Plan (HBP) to help purchase your first home. The FHSA allows you to make qualifying tax-free withdrawals from your account, while the HBP allows you to withdraw eligible funds from your RRSP. Using both programs together can help you maximize the amount available for your down payment.
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If you don’t end up buying a qualifying home, you have options. You can transfer your FHSA funds to an RRSP or RRIF on a tax-deferred basis, as long as you follow the applicable rules. These transfers won’t affect your RRSP contribution room.
If you choose to withdraw the funds instead, the amount withdrawn will generally be considered taxable income. An FHSA must be closed by the end of the 15th year after it was opened, the year you turn 71 or when you make a qualifying withdrawal, whichever comes first. A Conexus Advisor can help you understand your options.
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An FHSA can remain open for up to 15 years from when it was opened, or until the end of the year you turn 71, whichever comes first.
We're here to help.
Not sure which investment option is right for you? Our advisors can help you understand your choices, explore different options and create a plan that fits your goals and financial situation.
