Announced by the Federal Government of Canada in April 2023, the First Home Savings Account (FHSA) is a registered savings plan designed for Canadian residents 18 years of age and older to help them purchase their first home.
- Contributions to a FHSA are tax deductible
- Withdrawals made for the purchase of a first home are not taxable
- Withdrawals made in a context other than the purchase of a first home will be treated as additional taxable income in the year the withdrawal occurs
- FHSA contribution room for a year is fixed. The maximum FHSA contribution is a set annual amount that is the same for everyone. A Canadian resident 18 years of age or older can contribute up to $8,000 per year. The lifetime contribution limit is $40,000
- Individuals have 15 years to use their FHSA, starting on the date the plan is opened
- Individuals can hold a FHSA, and a TFSA or RRSP (or all three) at the same time
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