By Sybille Schaufler, CPB on Thursday, 25 May 2023
Category: Income Tax

First Home Savings Accounts Help Save Taxes

First Home Savings Accounts, or FHSAs combine the concept of Tax-Free Savings Accounts and Registered Retirement Savings Plans. For people aged 18 and older, like an RRSP, contributors receive a tax deduction on contributions and TFSA-like tax-free withdrawals when using the savings to buy a home. Further, any investment gains earned in the account are tax-sheltered.

Eligibility - you must be:

Contributions & Tax Deductions

Income

Qualifying investments

Like RRSPs and TFSAs, these can include:

Withdrawals 

Your Spouse

Transfers

The transfer of funds from an FHSA to an RRSP does not reduce your available RRSP contribution room, so you can effectively create more RRSP room by starting to contribute to an FHSA.

An FSHA must eventually be closed. There are several conditions involved in either closing or transferring. If you find yourself in this situation, click here to see if we are a good fit for your taxation needs if you find yourself in this situation.

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