A First Home Savings Account (FHSA) is a tax-free savings account designed to assist first-time homebuyers in saving for their future home purchase. It combines features of both Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). Contributions to an FHSA are tax-deductible, meaning they reduce your taxable income for the year in which they are made. The funds within an FHSA grow tax-free, and when withdrawn for a qualifying home purchase, the amount withdrawn is not subject to taxation. If the funds are not used for a home purchase, they can be transferred to an RRSP or RRIF without affecting contribution room. The account has a fifteen-year life span, after which any remaining funds must be transferred to an RRSP or RRIF.

To open an FHSA, you must be a Canadian resident, eighteen (18) years or older, and a first-time homebuyer.

The annual contribution limit for an FHSA is $8,000, with a lifetime limit of $40,000.

Contributions made to an FHSA are tax-deductible, reducing your taxable income for the year in which they are made.

After the fifteen-year life span, any remaining funds in the FHSA must be transferred to an RRSP or RRIF.

Yes, withdrawing funds from an FHSA for non-qualifying purposes may result in penalties and taxation on the withdrawn amount.