What is a First Home Savings Account (FHSA)?
The First Home Savings Account (FHSA) is intended to assist you in making tax-free savings for your first house.
- First-time homebuyers can open a first home savings account (FHSA).
- First-time homebuyers can use this account primarily to assist with purchasing their first home.
Why should I consider opening an FHSA?
- Get Tax Benefits
Your FHSA contributions may reduce your taxable income.
- Increase your savings tax-free.
Investment income in your FHSA is not subject to taxes.
Invest in stocks, ETFs, mutual funds, and savings accounts.
- Save tax-free for your first home.
You won’t be taxed on withdrawals using your FHSA to buy an eligible home.
Who’s eligible for the FHSA?
- You are required to live in Canada.
- You must be at least eighteen (18 or the majority in your province or territory).
- No property you or your spouse has owned during the last four calendar years or the year the account was opened is allowed to be owned by you or them.
“How much can I deposit and withdraw from my First Home Saver Account (FHSA)?”
Contributions to the FHSA are tax-deductible up to $8,000 annually and $40,000 lifetime.
As soon as you open your first account, your contribution room accumulates. Up to $8,000, you can carry over any unused FHSA contribution room for use the following year.
FHSA contributions must be used within 15 years of account opening or by the time you turn 71, whichever comes first. You can make a taxable withdrawal or move savings into an RRSP or RRIF after that point.
Our accountants are here to turn your homeownership dreams into a strategic financial plan. The tax experts in One Accounting can provide valuable assistance with the First Home Savings Account (FHSA) in various ways, provide financial expertise, and assist you in making well-informed and strategic decisions.
Our Mississauga Accountants are well-versed in tax laws and can help you understand the tax implications of contributing to an FHSA. They can advise on how contributions and withdrawals affect your overall tax situation.
