FHSA - First Home Savings Account is a new registered plan that you can contribute towards your first home. It came out in April 1st, 2023 aiming to incentive people to save money for their first home acquisition.
There are some conditions to open a FHSA, such as age limit, residency status, and previous ownership of a home.
In this program, you can contribute up to CAD 8,000 per year at a total of CAD 40,000 lifetime limit. If you have opened an account in a year and have not made any contribution in that year, you can carry forward up to CAD 8,000 in contribution room. However, if you haven't contributed for several years in a row, you can only carry forward the immediate previous year, which is CAD 8,000.
FHSA is an individual account, which means if you are married or common-law your significant other may be eligible to open their own account as well. In that case, the couple will be able to save up to CAD 16,000 per year tax-free.
Last, and more importantly, the contributions made towards your FHSA is tax-deductible and if you withdraw the amount to purchase a qualifying home, your withdrawal is tax-free.
If you are interested in this new program you can talk to your financial institution manager and also take a look at CRA website for more details.
At iRefund we are able to take care of your tax return and deal with this new program for you to not lose a penny. Make sure to get your hands on the new T4FHSA slip.
Start your tax return process using this link: Tax Organizer