What is the New and Shiny "First Home Savings Account (FHSA)”
Jen Fuentes • 8 August 2023
On April 1, 2023, the government introduced its latest incentive designed to assist first-time homebuyers in saving for their down payment, all while enjoying a tax-free benefit. This incentive has already gained immense popularity, particularly among banks that have enthusiastically offered it to their customers.
But what makes it such a hit?
Every contribution towards this account, from savings to gains and withdrawals, is entirely tax-deductible. This standout feature sets it apart, making it a game-changer for aspiring homeowners.
To break down the key points and benefits:
- You must be a first-time homebuyer; if you're uncertain about your eligibility, explore the government's website (CRA's FHSA).
- An impressive yearly savings cap of $8,000, reaching a maximum of $40,000.
- No obligation to repay the contributions used (unlike the Home Buyer Plan's RRSP repayments within 15 years).
- The ability to combine both FHSA (TFSA) & HBP (RRSP) for a down payment towards your principal residence.
- Unused contribution room carries over to the following year.
- You can transfer unused FHSA funds into an RRSP.
While not all major banks have rolled out the FHSA for their clients, it's notable that RBC, EQ Bank, and QuestTrade have already embraced and launched this program. BMO, Scotiabank, and CIBC are aiming to make it available by mid to late 2023.
Should you have any inquiries, please feel free to reach out—I'm here to assist.
**I strongly recommend seeking advice from your tax or investment professional to determine if this is the right choice for you!
Jen Fluentes
Mortgage Broker &
Franchise Owner
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