The First Home Savings Account

Prior to 2023, first time home buyers could withdraw money from their RRSP to put towards their downpayment. Due to the rising house prices, the government started a new account that combines the best of RRSP and TFSA.  The First Home Savings Account (FHSA) offers tax-deduction benefits and investments grow without incurring taxes. Essentially, the funds contributed are deducted from the taxable income and  the returns earned in this account will go directly toward your first home’s down payment without any taxes owed.  Canadians can save up to $40,000 for their first home Each year, you receive additional contribution room in your FHSA. As of 2024, you can contribute up to $8,000 annually. Be sure to monitor your contributions to avoid exceeding the limit.To qualify for the FHSA, you must meet the following criteria:  

• Be a resident of Canada. 

• Be at least 18 years old (or the age of majority in your province or territory). 

• Neither you nor your spouse should have owned a home that you lived in at any point during the year the account was opened or in the previous four calendar years.