First Home Savings Accounts (FHSAs) let first-time homebuyers save up to $40,000, tax-free, to put toward a down payment on a home. The government allows you to contribute $8,000 per year (plus any unused participation room) up to a maximum lifetime amount of $40,000. You have 15 years to spend the money on a down payment toward a home.
The amount you contribute is deducted from your income for tax purposes. Additionally, gains made within an FHSA are not taxable. Learn more about FHSAs.
There are a few things to keep track of when you contribute to an FHSA:
- Participation room: The amount you can contribute to your FHSA in a calendar year (January to December).
- Unused participation room: Any unused participation room carries over to the next year.
Find your FHSA participation room
The most reliable way to find your participation room is to log in or register for an online account with the Canada Revenue Agency. Alternatively, you can also look for this on your most recent Notice of Assessment.
What to do if you over contribute to your FHSA
If you over contribute to your FHSA, you have to pay a tax of 1% per month on the excess contributions that exceed your FHSA participation limit. You’ll have to pay this tax until you remove the excess amounts from your FHSA, or until your participation room increases to accommodate for the excess contributions. Learn how to remove excess FHSA amounts.
If you don't use the funds in your FHSA
If you don't use the funds in your FHSA within 15 years of opening your account (or by the year you turn 71), you can transfer it, tax-free, to an RRSP or a Registered Retirement Income Fund. You could also withdraw and pay taxes on the funds.
Withdraw from your FHSA
Learn more about withdrawal considerations and how to withdraw from your FHSA.
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