Save for your future by contributing to a First Home Savings Account (FHSA)

FHSA Details

• The First Home Savings Account (FHSA) was introduced in 2023 as registered plan that and offers Canadian residents at least 18 years of age (19 in some provinces) an opportunity to save tax-free for your first home.
• You may contribute up to $8,000 per year with a lifetime contribution limit of $40,000.
• You can contribute for a 15-year period or until you reach the $40,000 limit.
• When you decide to purchase your first home you can withdraw the funds (including tax-free gains) and use the funds for a down payment.
• You can open a FHSA even if you don’t plan on contributing immediately as you have 15 years to contribute (until you turn 71).



FHSA Benefits

• Contributions to a FHSA allow you to reduce your taxable income by deducting your contribution when you file your taxes. To take advantage of this benefit for 2024 you must make your contribution by December 31st.  
• You can carry forward unused contributions subject to the lifetime $40,000 limit.
• Your spouse or common law partner can have their own FHSA so when it comes time to purchase your first home you can withdraw the combined amount.
• If you decide not to buy a home using funds from your FHSA you can transfer the funds directly to a Registered Retirement Savings Plan (RRSP).

There’s nothing like the power of tax-free compounding returns. The sooner you start contributing to a tax-free (FHSA, TFSA), tax-deferred (RRSP) or tax-advantaged account (RESP, RDSP) the more time you’ll have to grow your wealth. If you would like to open an account or if you have questions about tax saving strategies, please contact your Palos advisor.