First Home Savings Account (FHSA)
What is the FHSA?
The First Home Savings Account (FHSA) is a tax-free1 way to save for a down payment on your first home. Introduced by the Government of Canada, this new registered account makes it easier to reach your home ownership goals.
The FHSA is coming soon to Meridian. To be notified when it's available, simply join our waitlist.
How does an FHSA work?
The FHSA has similar tax benefits to Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). Like an RRSP, FHSA contributions are tax deductible, and your savings will grow tax-free1. Like a TFSA, you can take money from your FHSA without paying tax2.
Contribute up to $8,000 each year, to a lifetime maximum of $40,0003. See our FHSA FAQs.
Why open an FHSA?
As your savings grow, tax-free1, you’ll keep more of the money you put away for your first property.
Reduce the tax you owe
When you put money into your FHSA, every dollar can reduce your taxable income for the year (just like an RRSP).
Change of plans? No problem. Any unused FHSA savings can be transferred, without being taxed, to another registered account, such as your RRSP or Registered Retirement Income Fund (RRIF).
Contributions and withdrawals
Flexible, tax-deductible contributions
Contribute up to $8,000 every year, to a lifetime maximum of $40,0003. Every dollar you put into your FHSA is tax-deductible1, which can reduce your taxable income. The lifespan of your FHSA is up to 15 years, with the freedom to carry forward unused contribution room from one year to the next.
Simple, non-taxable withdrawals
When it’s time to withdraw money for a qualified home purchase, withdrawals from your FHSA won’t be taxed2. This means your savings can be used directly towards your home, without being taxed as income. If you have any unused FHSA funds, they can be transferred, tax-free, to your RRSP or RRIF.
Saving for a home just got easier
Canadian residents, ages 18 and over, are eligible to open an FHSA account4. Keep in mind, when it comes time to use your FHSA money for a home, there are a few restrictions, including:
You must be a Canadian resident and a first-time homebuyer.
You’ll need proof that you intend to purchase or build a qualifying home.
You must plan to occupy the home within one year, as your principal residence.
The Canada Revenue Agency (CRA) considers you a first-time homebuyer if you have not occupied a home that you, or your current spouse or common-law partner, have owned in the last four years. If you live with a disability, or are helping a disabled relative to buy or build a home, there may be exceptions.
Yes. Let’s say you have $2,000 to contribute this year, but expect to have more to contribute next year. Your $2,000 contribution can start to grow tax-free1 right away. Next year, you’ll have $8,000 of contribution room, plus the $6,000 of unused room from this year, for a potential contribution of $14,000.
The lifespan of an FHSA is 15 years. If you start contributing at age 25, you’ll have until age 40 to use your savings towards a qualified home purchase.
Within the HBP, you can withdraw up to $35,000 from your RRSP, to help buy or build a qualifying home. While both the HBP and the FHSA are designed to help first-time homebuyers, the HPB requires that you repay the funds to your RRSP within 15 years. The FHSA has no requirement to pay back or replace the funds you’ve used. For more information on the HBP, see Help for First-Time Home Buyers.
Yes. The HBP allows you to use a portion of your RRSP savings towards your first home. You can use both the HBP and the FHSA to maximize the amount you can put towards your first home. Unlike the HBP, there is no repayment required for the FHSA.
If you have a change in plans and decide not to use your FHSA money to purchase a home, you have two options. You can transfer the money from your FHSA to your bank account, but you will have to pay tax on the total amount. Alternately, you could transfer your FHSA funds to either your RRSP or RRIF, without having to pay tax until you eventually withdraw the money.
Yes. You can transfer money from your RRSP to your FHSA without paying additional tax, but the transfers are subject to FHSA annual and lifetime contribution limits. Keep in mind, a transfer from your RRSP to FHSA does not qualify for income tax deductions, nor does it create RRSP contribution room. In-kind transfers are not currently available for the FHSA.
Join our waitlist
Interested in knowing when the First Home Savings Account is available? Sign up here to let us know.