FHSA & Savings
FHSA in Canada: A Practical Guide to Saving for Your First Home
The FHSA combines useful registered-account tax features to help eligible Canadians save for a first home. Learn the basics and what records to keep.
What is an FHSA?
A First Home Savings Account (FHSA) is a registered account designed to help eligible Canadians save toward a qualifying first home. Eligible contributions may generally be deductible for income-tax purposes, while qualifying withdrawals used for a qualifying home can generally be made tax-free.
Contribution room
FHSA participation is subject to annual and lifetime limits. Opening an FHSA is important because room does not simply accumulate indefinitely before an account is opened. Check your available room before contributing and keep records of contributions.
The tax deduction
Eligible FHSA contributions may generally be claimed as an income-tax deduction. A deduction reduces taxable income rather than reducing tax dollar-for-dollar. Keep official contribution records with your tax documents.
Qualifying withdrawals
Not every FHSA withdrawal is automatically tax-free. Conditions apply to qualifying withdrawals, so verify the current requirements before withdrawing money for a home purchase.
FHSA, RRSP and TFSA
These accounts have different purposes. RRSPs are primarily for retirement savings, TFSAs provide flexible tax-free growth and withdrawals, and FHSAs are specifically designed around qualifying first-home saving. Depending on circumstances, more than one account can form part of a savings plan.
Keep good records
Save contribution receipts, statements, tax slips and documents related to a future home purchase or withdrawal. A simple annual review can help you confirm contributions, available room and tax documents.
Plan before you file
TiKi Tax helps Canadians organize tax records and prepare for tax filing. Keep FHSA documents with your other tax records so they are ready at filing time.
Start at app.tikitax.ca or visit tikitax.ca.
General educational information only, not individualized tax, legal or investment advice. Registered-account rules can change; confirm current requirements with the Canada Revenue Agency.