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First Home Savings Account (FHSA)

A First Home Savings Account (FHSA) is a registered savings plan designed to help eligible first-time home buyers save for the purchase of a qualifying first home in Canada. It combines the benefits of both an RRSP and a TFSA:
 

  • Contributions are tax-deductible, helping reduce your taxable income.

  • Investment income and withdrawals are tax-free when used to buy or build your first home.

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FHSA Benefits

  • Tax-deductible contributions: Like an RRSP, contributions to an FHSA reduce your annual taxable income.
     

  • Tax-free growth and withdrawals: Investment income and withdrawals are tax-free when used to buy or build a qualifying first home in Canada.
     

  • No repayment required: Unlike the RRSP Home Buyers’ Plan (HBP), funds withdrawn from an FHSA for a first home purchase do not need to be repaid.
     

  • Carry-forward contribution room: Unused contribution room (up to $8,000) can be carried forward to future years, allowing a maximum contribution of $16,000 in a single year.
     

  • Flexible transfers: If you don’t use the FHSA funds for a home purchase, you can transfer them tax-free to your RRSP or RRIF without affecting your RRSP contribution room.

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