The FHSA stands for First Home Savings Account, which is a Canadian government initiative introduced in the 2022 federal budget. It is designed to help Canadians save for their first home by offering a tax-advantaged savings account with features of both a RRSP (Registered Retirement Savings Plan) and a TFSA (Tax-Free Savings Account).
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Tax-deductible contributions: Similar to an RRSP, contributions to an FHSA are tax-deductible, reducing your taxable income for the year in which the contribution is made.
Tax-free withdrawals: Like a TFSA, any withdrawals used to purchase a first home are tax-free.
The FHSA is available to Canadian residents who are 18 years of age or older and are first-time homebuyers.
A first-time homebuyer is generally someone who hasn’t owned a home in the past 4 years.