First Home Savings Account (FHSA)

Annual contributions are capped at $8,000 with a lifetime contribution limit of $40,000. 
Unused contribution room from one year can be carried forward to the next year. So, for example, if you contributed $2,000 one year, you could carry an additional $6,000 into the next year, making your annual contribution limit a total of $14,000 that year.

To open an FHSA, you must:

• Be 18 years or older
• Be a resident of Canada 
• Be a first-time home buyer

You must be a resident of Canada purchasing your first home. You must have a written agreement to buy or build a qualifying home, in Canada, that you intend to occupy as your principal place of residence within one year of purchase or building.

Similar to a TFSA, it is your responsibility to make sure you do not go over your maximum annual contribution limit. Any over-contributions are subject to penalties and interest.

Yes – the account can be active for whichever comes first:
•    A maximum of 15 years
•    Until you turn 71
•    Until the end of the year following your qualifying withdrawal for a first-time home purchase

Any savings you don’t use to purchase your first home can be transferred to a Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) and taxed upon withdrawal according to the applicable rules. If you choose to withdraw unused savings from the FHSA, those funds would be subject to taxes.

With the Home Buyer’s Plan, Canadians can withdraw up to $60,000 from their RRSP, and the funds must be paid back within 15 years. The FHSA is set up to help you save to purchase your first home and funds do not need to be paid back into the account.