Last updated: March 3, 2023
What’s an FHSA?
The Tax-Free First Home Savings Account (FHSA) is a registered investment account that allows Canadian residents to contribute up to $40,000 (with an annual contribution limit of $8,000) to buy their first home in Canada.
You can hold various investments within an FHSA – including mutual funds and segregated funds. And, any investment growth and withdrawals from a FHSA will be tax-free. This is provided you use your withdrawals to buy a qualifying home.A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family, semi-detached, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify. A share in a co-operative housing corporation also qualifies if it entitles you to possess and gives you an equity interest in a housing unit located in Canada. Connect with an advisor for more information.
Plus, any contributions you make to an FHSA will be tax-deductible. This means you can claim a deduction and lower your taxable income, which may reduce the amount of tax you’ll have to pay overall.