05/09/2025
Saving for your first home? Connect with me to create a strategy so you can get your keys sooner.
Transcript: What is an FHSA? Simply put, the First Home Savings Account, or FHSA, is a new type of registered savings plan. The FHSA allows first-time home buyers to save towards their first home, in a tax-free savings vehicle. How does an FHSA work? To open an FHSA, you must be a Canadian resident, be at least 18 years old and under age 71, and not have owned a home in the current or previous four calendar years. You can contribute up to $8,000 per year to the account, up to a total of $40,000. You can use your contributions and any investment growth for a first-home purchase. However, if you don’t use withdrawals for a first home within 15 years, they’ll be considered taxable income. What are the advantages of an FHSA? The main advantage of an FHSA is that it allows first-time home buyers to save for a home purchase in a tax-efficient way. Contributions to the FHSA are deductible for tax purposes, similar to an RRSP. And you don’t have to pay tax on either the contributions or investment earnings, as long as you don’t over-contribute. That means the money can grow faster over time. Another key benefit is that the withdrawals you use for a first home are also tax-free, when you use them to buy a qualifying first home. If you’re a first-time home buyer, the FHSA can make it easier for you to save for a down payment and purchase a home sooner, than if you had saved in a regular, taxable account. For more tips and tools, visit sunlife.ca.
