First Home Savings Account (FHSA)

Add a tax-free piece to your home buying puzzle.

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What’s an FHSA and why get one?

A First Home Savings Account (FHSA) is a tax-free way to work towards your first home. This account was introduced by the Government of Canada in 2022.

Grow your savings

Invest your hard-earned money, grow it tax-free, and withdraw it when you find your first home.

Enjoy tax-free qualified withdrawals

Qualified withdrawals from your FHSA to buy a home won’t be taxable.

Pay less income tax

Contributions can be used as deductions against your earned income, lowering the tax you pay when you file your return. And like a TFSA, your investment earnings won’t be taxed either.

Get flexibility to fit your plans

You can keep your FHSA open for 15 years, but if you don’t end up buying a home, you can transfer your FHSA savings to an RRSP or RRIF without paying taxes on the transfer.

How an FHSA works.

Open a FHSA

To be eligible you must:

  • Be a Canadian resident
  • Have a valid SIN (Social Insurance Number)
  • Be 19 years or older
  • Is a first-time home buyer, and
  • Has not used FHSA in the past

Plus, at Vancity, you have the opportunity to invest in a world you want to live in with Socially Responsible Investing options.

Not sure what qualifies as a first home? See FAQs

Choose an investment “vehicle”

These are the actual investments that go into your account. They can be low-risk, like our Jumpstart™ High Interest Savings Account or term deposits; or mutual funds* . You can go for something in the middle with mutual funds* which sit in the middle and have a variety of risk levels. You can also choose a mix.

Talk to an advisor today to get personalized advice.

Make deposits and review your progress

Put your money into the investment, or multiple investments, that you chose. Be aware that an over contribution will result in a penalty tax.

Over time, you should see your investment grow. As time passes, continue to make contributions and even add different types of investments to the mix so you can save and earn more.

Book a portfolio review

Every year at tax season

Like an RRSP, with an FHSA you can deduct your contributions from your taxable income and save taxes. Note, you don’t have to deduct your contributions within the same year that you make them. In some cases, you may see more benefit in deducting over several years, or in higher income years.

Investment income you make through your FHSA won’t be taxed if you use the funds to buy your first home.

Withdraw when you find your first home

Once you’ve found the home for you, withdraw your funds tax-free. Your FHSA can stay open for 15 years or until the end of the year you turn 71, or at the end of the year after your withdrawal — whichever comes first.

Withdrawals to puchase your first home cannot be made more than 30 days in advance of signing the purchase agreement.

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FHSA takeaways.

$8,000

Contribution room

Contribute up to $8,000 to your FHSA every year up to a lifetime contribution limit of $40,000. Once opened, you can carry forward up to $8,000 per year in unused contributions, subject to the lifetime limit.

15 years

Timeline

You can keep your FHSA open for 15 years. If you don't end up buying a home, you can transfer your FHSA savings to an RRSP or RRIF without paying taxes on the transfer.

Tax-free

Qualified withdrawals

Like a TFSA, qualifying withdrawals from your FHSA to purchase your first home are non-taxable. And contributions are tax-deductible but don’t need to be repaid (unlike the Home Buyer’s Plan in an RRSP).

Saving for your first home?

Grow your down payment

Interested in keeping your home savings in a TFSA or another type of investment? We can work with you to choose investment options that can benefit your future and your community’s, too.

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Open an FHSA savings account or term deposit

Log in and apply to open a Jumpstart™ High Interest Savings Account or term deposit for your FHSA.

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Read the home buyer guide

We have plenty of resources to guide you through your first-time home ownership journey, from building your down payment to choosing the right mortgage for your needs.

Get the guide

Ask the pros.

Our pros with some advice on FHSAs.

Who can be considered a first-time home buyer? What’s considered a first home?

You are considered a first-time home buyer if you did not live in a “qualifying home” owned by you, or your spouse or common-law partner, at any time in the calendar year before your FHSA account is opened or the previous four years.

A "qualifying home" is defined as a housing unit located in Canada. This includes shares to own a unit of co-op housing.

What else can I do to save for my first home?

There are many ways to build your down payment for your first home, and everyone’s setup is unique. You might consider consolidating debt under a single loan, invest with an RRSP, in term deposits or a high interest savings account —or a combination of those things.

The best way to start is by booking an appointment with us. Our specialists can work with you to build your down payment in a way that makes sense for your unique financial needs and goals.

How is the FHSA different from the Home Buyers’ Plan (HBP)?

The Canadian Home Buyers’ Plan allows you to withdraw up to $60,000 from your RRSPs to buy or build a qualifying home and pay back the funds to your RRSP over 15 years.

If you’re already participating in the Home Buyers’ Plan (HBP), you’ll have the option to combine your HBP and FHSA to buy the same property. But unlike the HBP, the funds you withdraw from your FHSA do not need to be paid back.

How many FHSAs can I have?

As a holder and owner of an FHSA, you can have as many FHSA accounts as you wish as long as you don’t exceed the annual and lifetime limits as provided by the Canada Revenue Agency(CRA).

What are the requirements for a qualifying withdrawal from my FHSA?

A qualifying withdrawal from your FHSA requires 3 things:

  1. You must be a first-time home buyer and resident of Canada at the time of withdrawal,
  2. You must have a written agreement to buy or build a qualifying home located in Canada before October 1 of the year following the year of withdrawal, and
  3. You must also plan to occupy the qualifying home as your principal place of residence within one year of buying or building it.
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