Tax-Free First Home Savings Account (FHSA)
- Allows “first-time” homebuyers to save for a down payment on a tax-free basis.
- There is a lifetime contribution limit of $40,000 and annual contribution limit of $8,000, beginning in 2023.
- You can claim an income tax deduction for contributions made in a particular calendar year.
- You can carry forward up to $8,000 of your unused annual contribution amount, subject to the lifetime contribution limit.
- You can contribute to your FHSA until December 31 of the year in which you reach age 71.
- The income earned in your FHSA is not taxed until it is withdrawn and withdrawals to purchase a first home are non-taxable. Remaining contributions not withdrawn for first home can be transferred tax free to RRSP.
- You must be an individual resident of Canada.
- You must be at least 18 years of age.
- You must be a “first-time” homebuyer – you or your spouse/common-law partner did not own a qualifying home that you lived in as a principle residence, at any part of the calendar year before the account is opened or the preceding four calendar years.