November 16, 2022 - Market & Finance - Real Estate Buying
Buyers: Do You Know About the FHSA?
The First Home Savings Account (FHSA)
In the 2022 federal budget, Canada announced the First Home Savings Account (FHSA) — a new registered account to help first-time buyers save tax-free.
What is it?
A tax-free savings account for your first home purchase. Annual limit: $8,000, lifetime maximum: $40,000. Contributions are tax-deductible (like an RRSP) and investment growth is tax-free (like a TFSA).
Withdrawals for purposes other than a first home purchase may be treated as taxable income by the CRA.
Who is Eligible?
- Canadian resident
- At least 18 years old
- Must not have lived in a home you owned in the past 4 years
FHSA vs. Home Buyers’ Plan (HBP)
| FHSA | HBP (RRSP) |
|---|---|
| Lifetime limit: $40,000 | Max withdrawal: $35,000 |
| No repayment required | Repay over 15 years |
| Min. 5 years to reach the limit | Faster access with existing RRSP |
Speak with a financial advisor to determine which tool best fits your situation!