First Home Savings Account (FHSA)

You are eligible to open a FHSA if you:

• are a first-time home buyer who has not lived in a home that was owned by you or your spouse/common-law partner in the calendar year in which you are opening the FHSA or at any time in the preceding four (4) calendar years,
• are a resident of Canada,
• are between the ages of 18 and 71, and
• have a valid SIN.

You don’t have to choose one or the other and can even use both. If your situation allows, you can withdraw up to $60,000 from your RRSP under the Home Buyers’ Plan (HBP) and make a qualifying withdrawal of up to $40,000 from your FHSA for the same qualifying home, as long as you meet all of the conditions at the time of each withdrawal. Alternatively, if you’ve accumulated RRSP savings with the intent of using the Home Buyers’ Plan in the future but prefer the features of the new FHSA, you can transfer available RRSP funds over to the FHSA, tax-free (within the FHSA qualifying conditions including annual and maximum contribution limits).

No, you will be able to use both your FHSA as well as make a withdrawal from your Registered Retirement Savings Plan (RRSP) under the Home Buyers’ Plan (HBP) to purchase a qualifying home. Keep in mind that with the HBP, you’ll have to repay any funds withdrawn from your RRSP.

Members can choose from our FHSA Investment Savings Account and a full selection of GICs.

It is possible to hold more than one FHSA, but the total contribution amount of all FHSAs cannot exceed the annual and lifetime limits. It’s important to keep careful track of your FHSA contributions to avoid overcontributing. Any overcontributions will result in a penalty tax on the over-contributed amount at a rate of 1% per month for each month the overcontribution remains in the FHSA.

The funds in your FHSA have to be used by December 31 of the 15th year after opening the account, or by December 31 of the year you turn 71, whichever comes earlier. If you have not used the funds in your FHSA by that time, you can transfer the funds from your FHSA on a tax-free basis to your RRSP without impacting your RRSP contribution room, or to your Registered Retirement Income Fund (RRIF). Otherwise, you can withdraw funds from your FHSA, but your withdrawal will be taxed at your applicable tax rate.

Starting in 2023, qualifying individuals can contribute $8,000 per year (by December 31st) to their FHSA. Unused contributions, up to $8,000, can be carried forward to future tax years, subject to a maximum lifetime limit of $40,000. Carry-forward room starts to accumulate after the FHSA is opened. The account holder is responsible for ensuring their maximum contribution room limit is not exceeded.

Since a qualifying withdrawal is non-taxable to the holder, certain conditions must be met for the holder to receive the withdrawal tax-free. When these conditions are met, a holder may withdraw funds at any time, unless restricted by investment terms (for example, a non-redeemable GIC that has not yet matured). The conditions must be disclosed in a prescribed form provided by the CRA, and include the holder meeting the following terms:

• First-time home buyer,
• Resident of Canada,
• The withdrawal is made within 30 days of moving into the home,
• Has a written agreement to buy or build a qualifying home before October 1st of the year following the withdrawal,
• The qualifying home is in Canada

A qualifying withdrawal does not generate taxable income and does not affect any income-tested benefits or credits of the holder.