FinviloFHSA explained: the First Home Savings Account for Canadian buyers
The FHSA lets first-time home buyers in Canada contribute up to CAD 8,000 a year, to a lifetime maximum of CAD 40,000. Contributions are tax-deductible like an RRSP, and a qualifying withdrawal to buy a first home is tax-free like a TFSA.
Who qualifies
You must be a Canadian resident, at least 18 (or the age of majority in your province), no older than 71 at the end of the year, and a first-time home buyer. For the FHSA, that means you did not live in a home that you or your spouse or common-law partner owned at any time in the current year or the previous four calendar years.
Limits and carry-forward
The annual limit is CAD 8,000 and the lifetime limit is CAD 40,000. Room only starts once you open an account, so opening early, even with a small deposit, starts the clock. Up to CAD 8,000 of unused room carries forward, so the most you could contribute in a single year is CAD 16,000.
How long the account can stay open
The account must be closed by the end of the year of its 15th anniversary, the year you turn 71, or the year after your first qualifying withdrawal, whichever comes first. Unused savings can be transferred to an RRSP or RRIF without affecting RRSP room.
FHSA or Home Buyers' Plan
You can use both for the same purchase. The Home Buyers' Plan lets you borrow from your RRSP but must be repaid over time; an FHSA qualifying withdrawal never has to be repaid.
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Frequently asked questions
- Can I hold investments in an FHSA?
- Yes. Eligible holdings are similar to a TFSA, including savings deposits, GICs, ETFs and stocks, depending on the provider.
- Do I have to claim the deduction in the year I contribute?
- No. You can carry the deduction forward to a later year when your income, and the tax saving, may be higher.
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Official sources
General information only, not personalized financial, tax or legal advice. Rules change; confirm current details with the source.