First Home Savings Account (FHSA)
Hello, Marie here!
Thought I would touch base with you with respect to Canada’s new First Home Savings Account (FHSA). I have been receiving quite a few queries on this new registered account introduced by the federal government this year.
A first home savings account (FHSA) is a registered plan allowing a prospective first-time home buyer to save for their first home tax-free (up to certain limits).
A few points of interest:
- You (and your spouse) must be considered a first-time home buyer (see link below for eligibility requirements). You must be a resident of Canada and 18 years of age or older.
- This account can be used in conjunction with the Home Buyers Plan (borrowing from your RRSP, tax free and interest free – For eligible first-time home buyers).
- You do not need RRSP contribution room to open and contribute to a FHSA and the contributions to a FHSA will not affect your RRSP contribution room/limit.
- Your FHSA participation room in the year that you open your first FHSA =$8,000, the lifetime FHSA limit =$40,000
- You can carry forward your unused FHSA participation room at the end of the year, up to a maximum of $8,000, to use in the following year.
- After you have opened your first FHSA, you can find the details about your FHSA participation room on your notice of assessment or reassessment.
For more information please call me or go to the government web page for more information about the FHSA.
Please note that while the Federal Government instituted this program effective April 1, 2023, many of the financial institutions are working hard to create the proper FHSA applications that are consistent with investment regulatory and compliance obligations.
