FIRST TIME HOME BUYERS SAVINGS PLAN ((TFSA)
A first home savings account (FHSA) is a registered plan allowing you, as a prospective first-time home buyer, to save for your first home tax-free (up to certain limits). You can open an FHSA starting April 1, 2023.
Notable features
• Gives first-time homebuyers the ability to save up to $40,000 on a tax-free basis.
• Like a Retirement Savings Plan (RSP), contributions are tax-deductible.
• Withdrawals to purchase a first home – including from investment income – are non-taxable, like a Tax-Free Savings Account (TFSA).
Who is eligible to open an FHSA ?
To open an FHSA, you must be a qualifying individual.
You are a qualifying individual if you meet all of the following requirements at the time the account is opened:
– at least 18 years of age
– not more than 71 years of age on December 31 of the year
– A resident of Canada
How much you can contribute or transfer ?
Your FHSA participation room for the year is the maximum amount that you can contribute to your FHSAs or transfer from your registered retirement savings plans (RRSPs) to your FHSAs in the year without creating an excess FHSA amount .
Your FHSA participation room in the year that you open your first FHSA =$8,000
The lifetime FHSA limit =$40,000
All contributions you make to your FHSAs and all transfers from your RRSPs to your FHSAs will reduce your remaining lifetime FHSA limit. If your contributions and transfers to your FHSAs in the year exceed your FHSA participation room for the year, you will have an excess FHSA amount.