SAVE MONEY3: What is FHSA?

The First Home Savings Account (FHSA) is a registered account that helps Canadians save for their first home faster. It combines features of an RRSP and a TFSA: contributions are tax-deductible, and qualifying withdrawals to buy your first home are tax-free, including the investment growth.

Key Benefits of an FHSA

• Tax-deductible contributions

  • You can contribute up to $8,000 per year, to a lifetime maximum of $40,000. Contributions reduce your taxable income, similar to an RRSP.

• Tax-free withdrawals for your first home

  • When you use the funds for a qualifying first-home purchase, withdrawals (contributions + growth) are tax-free, like a TFSA.

• Flexible investment options

  • You can hold GICs, mutual funds, ETFs, and other typical registered investments inside an FHSA, allowing your savings to grow over time.

• Works with the Home Buyers’ Plan (HBP)

  • You can use both the FHSA and RRSP Home Buyers’ Plan together to maximize your first-home down payment.

(Note: Specific dollar limits and detailed conditions must be confirmed with the latest CRA/Ottawa rules or a licensed tax professional, as they can change over time.)

Who Is the FHSA For?

The FHSA is specifically targeted at:

• Canadians who have not owned a home (as defined by CRA) in the last four calendar years

• First-time buyers planning to purchase a qualifying home in Canada

• Young professionals, new families, and renters who want a tax-efficient way to build a down payment

If you are a first-time homebuyer in Canada and you plan to purchase within the next few years, an FHSA is one of the most powerful tax tools available to help you save and reduce the cost of homeownership.

Source:

https://www.scotiabank.com/ca/en/personal/advice-plus/features/posts.understanding-fhsa-contribution-limits.html