Your contribution to the FHSA account is tax-deductible, like that of the RRSP. This helps to lower your tax bill. The invested money is withdrawn tax-free, as with a TFSA.
You can carry over the FHSA deduction, as with the RRSP deduction.
Eligibility for FHSA: You qualify if you are 18 or older. You must also be a resident of Canada. Additionally, you must be a first-time home buyer.
Lifetime Max – $40,000
Gain contribution Room – $8000 / Year
You don’t have to max out $ 8,000 per year. Contribute what you can for the Year by 31 Dec. Claim for that tax year, or Carry Forward beyond for a more significant tax claim.
Opening an FHSA account early will help you start building your contribution room.
You can keep FHSA Open for up to 15 years.
Even if buying a house is off your radar, 15 years is still a long time.
The revised legislation allows first-home buyers to combine the FHSA and HBP when purchasing the same qualifying home.
| HBP ** | FHSB |
|---|---|
| Limit = $35,000 | Limit = $40,000 |
| There’s no minimum holding period for funds in an FHSA before contributions can be withdrawn. | There’s no minimum period for money to be held in an FHSA before contributions can be withdrawn. |
| Need to Pay Back over 15 Years period. | Don’t need to Pay Back under qualifying Home Purchase. |
Total Contribution Toward First Time Home Buyer: $35,000 + $40,000 = $75,000
** The Home Buyers’ Plan (HBP) is a Canadian government program that allows first-time home buyers to withdraw up to a specified amount from their Registered Retirement Savings Plan (RRSP) to purchase or build a qualifying home.
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