FHSA (First Home Savings Account)

A First Home Savings Account (FHSA) is a registered account with specific tax advantages:

The Features of a FHSA include:

  • Helps you save - For the down payment on your first home 
  • Tax-free – Investment income and capital gains earned in a FHSA are not taxed, even when you withdraw money from the account. This makes investments with higher returns more attractive. 
  • What investments are eligible? – An FHSA can hold a combination of eligible investments, such as mutual funds, stocks, bonds and ETFs *, Guaranteed Investment Certificates (GICs) and cash. 
  • How much can I contribute annually? –  Click here to determine the annual limit of your FHSA contributions. 
  • How much can I contribute from past unused room? – You can carry forward the unused contribution amount to future years. 
  • Beneficiary considerations – You can set up the account’s assets to transfer directly to your spouse or common-law partner upon your death, as long as he or she is named beneficiary on your FHSA.
  • Information on FHSAs from the CRA website
  • Ask us today about GIC deposit rates!

First Home Savings Account (FHSA) 

What is it and how does it work? 

The First Home Savings Account (FHSA) is a savings plan that allows Canadian first-time home buyers to save for their first home. The FHSA is a registered product where contributions are tax deductible and the growth within the account is tax free.  

What should you know? 

  • An individual can contribute $8,000 per year to their FHSA, and the lifetime contribution limit is $40,000 (for example: a couple can each contribute to their individual contribution limits). Unused contributions up to $8,000 can be carried forward to future tax years 
  • An FHSA can only be open for 15 years and must be closed by the end of the year when the holder reaches age 71 
  • The FHSA must be closed by the earlier of December 31 of the 15th year after opening, December 31 of the year the individual turns 71, or December 31 of the year following the first qualifying withdrawal from FHSA. 
  • Contributions to your FHSA are tax deductible and can be used as a deduction against your income in the year of the deposit 
  • The contributor must keep track of their own contributions to avoid over-contribution penalties imposed by CRA (Canada Revenue Agency) 

What is qualifying a withdrawal?  

  • The Individual must be a first-time home buyer* 
  • The individual is a resident of Canada 
  • The withdrawal is made within 30 days of moving into the home 
  • The qualifying home is in Canada 
  • The individual has a written agreement to buy or build a qualifying home before October 1st of the year following the withdrawal 

Who is eligible? 

  • Individuals who are at least 18 years old 
  • Individuals who are a resident of Canada 
  • Individuals who are first-time home buyers 
  • Individuals who have a valid SIN 

What if I don’t buy a home? 

  • Any unused funds after the qualified withdrawal may be transferred tax-free to an RRSP or RRIF 
  • Funds transferred to RRSPs (Registered Retirement Savings Plans) or RRIFs (Registered Retirement Income Funds) will be subject to their rules and tax considerations 

What if I have questions? 

  • Our knowledgeable staff at KCCU (Kingston Community Credit Union) are ready to help you find the best savings option(s).  Book an appointment with an advisor today. 
  • *a first-time homebuyer is someone who has not owned a home in which you lived in, any time in the preceding four calendar years.  

*Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Commissions, trailing commissions, management fees, and expenses may all be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds, other securities, and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated. 

For the most updated information on annual and lifetime contribution limits, features, and a detailed description visit The Government of Canada's FHSA information website.