A first home savings account (FHSA) is a registered plan which allows you, if you are a first-time home buyer, to save to buy or build a qualifying first home tax-free (up to certain limits).
FIRST HOME SAVINGS ACCOUNT DETAILS
Who can open an FHSA
To open an FHSA, you must be a qualifying individual by meeting all of the conditions below when you open your account.
You need to meet all of the above conditions to open an FHSA
If you do not meet all of the conditions above, you are not a qualifying individual and cannot open an FHSA.
How to open an FHSA
You can open one or more than one FHSA through an FHSA issuer, such as a bank, credit union, or a trust or insurance company. Your issuer will advise you on the types of FHSAs and the qualified investments they offer. For more information on the types of investments permitted in your FHSAs, go to Investments in your FHSAs.
To open an FHSA, you must do the following:
- Contact your issuer
- Provide the issuer with the information they need to register your FHSA, including:
- your social insurance number
- your date of birth
- any supporting documents your issuer may need to certify that you are a qualifying individual
If you provide information to the issuer and it is subsequently determined that you provided incorrect information, it is possible that the registration of your FHSA may be revoked as far back as the date on which it was opened.
The following will apply after the date of revocation:
- any contributions made to the account will not be tax-deductible
- any amounts transferred from your RRSPs to the account will be treated as an RRSP withdrawal and must be reported as income on your income tax and benefit return for the year of transfer
- any income earned under the account will not be tax-free and must be reported on your income tax and benefit return for the year it was earned
When you open your FHSAs, you may want to designate a beneficiary on your account. For more information, go to Types of beneficiaries.
File your income tax and benefit return
You must file your income tax and benefit return for the year that you opened your first FHSA to let us know that you opened an account, even if you did not contribute to your FHSAs or transfer property from your RRSPs to your FHSAs in that year.
More information about where to include the above information on your income tax and benefit return will be available at a later date.
Types of FHSAs
There are three types of FHSAs that can be offered:
- a depositary FHSA
- an account (with a financial institution) that holds money, term deposits, or guaranteed investment certificates (GICs)
- a trusteed FHSA
- a trust (with a trust company as trustee) that holds qualified investments such as money, term deposits, GICs, government and corporate bonds, mutual funds, and securities listed on a designated stock exchange
- an insured FHSA
- an annuity contract (with a licensed annuity provider)
For information about a type of FHSA, contact an FHSA issuer.
Self-directed FHSA
You can set up a self-directed FHSA if you prefer to build and manage your investment portfolio by buying and selling different types of qualified investments. For more information, contact an FHSA issuer.
How much you can contribute or transfer
Your FHSA participation room for the year is the maximum amount that you may contribute or transfer to your FHSAs in the year without creating an excess FHSA amount .
Your FHSA participation room in the year you open your first FHSA =$8,000
Generally, your next year's FHSA participation room will be:
- plus $8,000 (new FHSA participation room for the next year)
- plus your unused FHSA participation room at the end of the current year (max. $8,000), subject to the lifetime FHSA limit
- equals next year's FHSA participation room
The lifetime FHSA limit =$40,000
Generally, all contributions you make to your FHSAs and all transfers from your registered retirement savings plans (RRSPs) to your FHSAs will reduce your remaining lifetime FHSA limit.
Unused FHSA participation room
In the year you open your first FHSA, if the total of your contributions to your FHSAs or transfers from your RRSPs to your FHSAs is less than $8,000, you will have unused FHSA participation room at the end of the first year. Generally, you calculate your unused FHSA participation room at the end of the first year as follows:
- plus your FHSA participation room for the first year
- minus all new contributions to your FHSAs and transfers from your RRSPs to your FHSAs in the first year
- your unused FHSA participation room at the end of the first year
You can carry forward up to a maximum of $8,000 of unused FHSA participation room at the end of the year to use in the following year, (subject to the lifetime FHSA limit).
The income earned by your FHSA will not impact your unused FHSA participation room.
Exceeding your FHSA participation room
If your contributions and transfers to your FHSAs in the year exceed your FHSA participation room for the year, you may have an excess FHSA amount. For more information about an excess FHSA amount, go to What happens if you contribute or transfer too much to your FHSAs.
If you had an excess FHSA amount and you designated an amount as a designated transfer or a designated withdrawal, the designated amount will restore your remaining lifetime FHSA limit.
Participation room applies to all of your FHSAs
Your FHSA participation room for the year applies towards all of the FHSAs you open. This means you can open more than one FHSA, but the total amount you can contribute to all of your FHSAs and transfer from your RRSPs to all of your FHSAs cannot be more than your FHSA participation room for the year.
You cannot participate in another individual's FHSA
Only the holder of the FHSA can participate directly in their own FHSAs. In addition, only the holder of the FHSA can claim the FHSA contributions as a tax deduction on their income tax and benefit return.
For more information about tax deductions for your FHSA contributions, go to Tax deductions for FHSA contributions.
Where to find your FHSA participation room
You must file your income tax and benefit return for the year that you opened your first FHSA to let us know that you opened an account, even if you did not contribute to your FHSA or transfer property from your RRSPs to your FHSA in that year. More information about where to include the above information will be available at a later date.
After you have filed your income tax and benefit return and filled out the schedule indicating that you have opened your first FHSA, you can find the details about your FHSA participation room for the following year on your:
- Latest notice of assessment
- Latest notice of reassessment
- Form T1028, Your RRSP, HBP, LLP or FHSA information for 2024
If the CRA reassesses your income tax and benefit return, your new FHSA participation room will appear on your notice of reassessment or, in some cases, on Form T1028.
If you do not have a copy of your notice of assessment or reassessment nor a Form T1028, you can find your FHSA participation room by calling the individual tax enquiries line at 1-800-959-8281.
Reporting contributions and transfers in your FHSAs
Your FHSA issuer will give you a T4FHSA First Home Savings Account Statement slip showing the total amounts you contributed to your FHSAs in box 18, and the total amounts you transferred from your RRSPs to your FHSAs in box 32 and box 34.
You must file your income tax and benefit return and fill out a schedule to report your contributions and transfers to your FHSAs in the year. More information about the schedule will be available at a later date.
For more information about your T4FHSA slip and how to report it on your income tax and benefit return, go to Reporting FHSA activities on your income tax and benefit return.
You can use these estimators to help you understand how a tax-free first home savings account (FHSA) can help you save for your first home. The first tool estimates how much you can save for your down payment, and the second tool shows your potential tax savings.
Learn about the FHSA before using these tools.
These tools provide estimates based on the information you entered. They are intended for illustrative and general information purposes. They may not fully capture your particular tax situation, which may affect the accuracy of the results.
To learn more or to use the estimator tools, please visit the Tax-Free First Home Savers Plan site.
