Want to know all about the FHSA, the new tax-free savings account for the purchase of a first home? We’ve gathered a wealth of information here to help you make the best decisions. FAQ, comparative table of registered plans: explore all the possibilities of this new savings product.
FHSA basics
The FHSA is a savings product for Canadian residents aged 18 and over that enables them to make contributions to a tax-free registered account with a view to buying a first home.
- The maximum annual contribution to the account is $8,000.
- The maximum lifetime contribution is $40,000.
- It is possible to carry forward up to $8,000 of unused contribution room to the next year.
- Contributions made to the account are tax-deductible.
- Capital gains and interest earned in the account are non-taxable.
- Withdrawals for the purchase of a first qualifying home are also tax-free (under certain conditions) and do not have to be paid back into the account.
- The HBP and the FHSA can be used together for the down payment on a first home.
- The FHSA can remain open for a period of 15 years and must be closed either at the end of the 15th year or the year following the withdrawal for the purchase of a qualifying home.
- If not used, the amounts accumulated in the FHSA can be transferred to an RRSP when the account is closed.
If you plan to buy a home or condo, talk to your advisor. Together, you can see if the FHSA fits into your purchase plan.
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