Everything You Need to Know About the First Home Savings Account (FHSA)

TLDRThe FHSA is a special savings account designed for first-time home buyers to save for their down payment. Contributions are tax-deductible and investment income is tax-free. There are contribution limits, and unused room can be carried forward. Only qualifying individuals can open an FHSA.

Key insights

💰The FHSA is a registered plan that allows first-time home buyers to save for a down payment tax-free.

📈Investment income earned in the FHSA is also tax-free, providing an opportunity for your savings to grow.

💡Unused contribution room in the FHSA can be carried forward to future years.

📋To open an FHSA, you must be at least 18 years old, a resident of Canada, and a first-time home buyer.

🏠The FHSA is different from other savings plans like the RSP and TFSA, as it is specifically designed for purchasing a home.

Q&A

What are the tax benefits of the FHSA?

—Contributions to the FHSA are tax-deductible, reducing your taxable income. Investment income earned within the FHSA is also tax-free.

Can I invest the money in my FHSA?

—Yes, you can invest the money in your FHSA in various investment products like stocks, bonds, mutual funds, and ETFs.

What happens if I don't fully use my contribution room in a year?

—Unused contribution room in the FHSA can be carried forward to future years, up to a maximum of $8,000.

Is there a maximum amount I can contribute to my FHSA?

—Yes, there is a maximum contribution limit for the FHSA. For example, the maximum amount is $88,000 for 2023.

Can I open multiple FHSA accounts?

—Yes, you can have multiple FHSA accounts with different financial institutions, but the combined amount cannot exceed the maximum limit.

Timestamped Summary

00:00The FHSA is a special savings account designed for first-time home buyers to save for their down payment.

01:32Contributions to the FHSA are tax-deductible, reducing your taxable income.

02:43Investment income earned within the FHSA is also tax-free, providing an opportunity for your savings to grow.

06:03Unused contribution room in the FHSA can be carried forward to future years.

07:56To open an FHSA, you must be at least 18 years old, a resident of Canada, and a first-time home buyer.

12:46The FHSA is different from other savings plans like the RSP and TFSA, as it is specifically designed for purchasing a home.

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