Introducing our new favourite four letter word: FHSA
Buying a first home is a major milestone, yet many Canadians find it increasingly challenging due to rising real estate prices. The Tax-Free First Home Savings Account (FHSA) is designed to alleviate these challenges. This innovative account combines the benefits of RRSP's tax deductibility and the TFSA's tax-free withdrawal features. Specifically crafted to assist first-time homebuyers, the FHSA provides substantial tax advantages to make saving for that all-important first home purchase more attainable. This account is a critical tool in your financial arsenal, offering both immediate and long-term tax benefits, thereby enhancing your ability to accumulate the needed funds for a down payment.The 411 on The FHSA
- Maximize Contributions: You can save up to $8,000 annually, with contributions reducing your taxable income—just like an RRSP. Your total contribution cap is $40,000, covering a significant portion of a high-ratio mortgage down payment.
- Tax-Free Growth and Withdrawals: Like a TFSA, the growth on your investments in the FHSA isn’t taxed, and you can withdraw funds tax-free when it's time to buy your first home.
- Invest and Grow: FHSA's can be invested a number of ways to grow while you save. GIC's, interest, bonds, stocks and much more.
- Flexible and Forward-Thinking: Unused contribution room rolls over, so you can save more as your income grows, with up to 15 years of tax-free saving potential.
- Double the Power: If you have a partner, you can both open FHSAs, doubling your collective purchasing power for that dream home.
- Eligibility: Open to Canadian residents over 18 who haven’t owned a home during the year of opening the account or in any of the previous four years.
Learn even more about the First Home Savings Account with our downloadable info guide >
