{"id":318807,"date":"2023-10-24T09:00:00","date_gmt":"2023-10-24T13:00:00","guid":{"rendered":"https:\/\/milesopedia.com\/?p=318807"},"modified":"2025-01-06T12:56:16","modified_gmt":"2025-01-06T17:56:16","slug":"fhsa-everything-you-need-to-know","status":"publish","type":"post","link":"https:\/\/milesopedia.com\/en\/personal-finance\/real-estate\/fhsa-everything-you-need-to-know\/","title":{"rendered":"FHSA: Everything you need to know"},"content":{"rendered":"

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Since 2023, a new tax-free savings account has been introduced in Canada to help you access the real estate market<\/a>. In this guide, we explain everything you need to know about the FHSA<\/strong> (tax-free savings account for first-time home buyers): how it works, eligibility criteria, contribution rights, tax deductions, tax-free withdrawals and eligible investments. With its tax advantages, you’ll quickly realize that it’s the most powerful savings plan ever created in Canada. <\/p>\n

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The First Home Savings Account (FHSA) is a new savings plan that allows eligible first-time homebuyers to save tax-free.<\/p>\n

However, FHSA offers much more… It allows tax-deductible contributions<\/strong> like RRSPs<\/a> and tax-free withdrawals<\/strong> like TFSAs<\/a>.<\/p>\n

What’s more, withdrawals from your FHSA are not limited to a fixed amount like the HBP<\/a> ($60,000). In fact, although your lifetime contribution room at FHSA is $40,000, your entire FHSA account (contributions and returns) can be used to purchase your first qualifying home. Which is a huge advantage.<\/p>\n

For example, if you invest $8,000 a year in your FHSA and earn an average annual return of 5%, you will have accumulated $46,415 after 5 years. If you wait 15 years before using your FHSA (maximum holding period), you will have accumulated $75,606… which you can withdraw tax-free to buy your first eligible home. <\/p>\n

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The key elements of FHSA are:<\/p>\n