First Home Savings Account (FHSA)
What is a First Home Savings Account (FHSA)?
The First Home Savings Account (FHSA) is intended to assist you in making tax-free savings for your first house.
A first home savings account (FHSA) can be opened by first-time homebuyers. First-time homebuyers can use this account especially to assist with the purchase of their first home.
Why should I consider opening an FHSA?
- Get Tax Benefits
Your taxable income may be reduced by your FHSA contributions
- Increase your savings tax-free
Investment income in your FHSA is not subject to taxes.
Invest in stocks, ETFs, mutual funds, savings accounts, and more.
- Save tax-free for your first home
If you use your FHSA to buy an eligible home, you won’t be taxed on your withdrawals.
“The First Home Savings Account (FHSA) allows Canadians to contribute up to $40,000 for their first home”
Who’s eligible for the FHSA?
- It is required that you live in Canada.
- You must be at least eighteen (18 years old, or the majority age in your province or territory).
- No property that you or your spouse has owned during the last four calendar years or the year the account was opened is allowed to be owned by you or them.
How much can I contribute and withdraw from the FHSA?
Contributions to the FHSA are tax deductible up to an annual maximum of $8,000 and a lifetime maximum of $40,000.
As soon as you open your first account, your contribution room begins to accumulate. Up to a total of $8,000, you can carry over any unused FHSA contribution room for use the following year.
FHSA contributions must be used within 15 years of account opening or by the time you turn 71 years old, whichever comes first. You have the option to make a taxable withdrawal or move savings into an RRSP or RRIF after that point.
- Annual contributions are capped at $8,000 up to a $40,000 lifetime contribution limit.
- A maximum of $8,000 unused contribution room can be carried over to the next year
- The account can stay open for up to 15 years or the age of 71st, whichever comes first.
Unlock your path to homeownership with expert guidance!
Our accountants are here to turn your homeownership dreams into a strategic financial plan. The tax experts in One Accounting can provide valuable assistance with the First Home Savings Account (FHSA) in various ways, offering financial expertise and strategic advice to help you make informed decisions.
Our Accountants are well-versed in tax laws and can help you understand the tax implications of contributing to an FHSA. They can advise on how contributions and withdrawals may affect your overall tax situation.
Let our accountants guide you toward that dream home!