In 1957, the Registered Retirement Savings Plan (RRSP) was born.

In 1974, Registered Education Savings Plans (RESP) came into existence.

In 1978, Registered Retirement Income Funds (RRIF) appeared.

In 2008, the Registered Disability Savings Plan (RDSP) was implemented

In 2009, the Tax Free Savings Account (TFSA) was created.

And, in 2023 we have the introduction of the First Home Savings Account.

 

The Tax-Free First Home Savings Account (FHSA) combines the tax-deductible contributions of an RRSP with the tax-free withdrawals of the TFSA, alongside a few other rules and regulations.

 

Jamie Golombek has a great explanation in this video. 

 

Main points of the FHSA:

1) Must be 18 years of age and not owning a home in the current year or preceeding 4 years

2) Tax-deductibility on your contributions

3) $8,000 per year to a limit of $40,000. 

4) Account must be withdrawn for a Home Purchase within 15 years

5) If you don't buy a home in those 15 years you can transfer the entire account to your RRSP regardless of the RRSP contribution room that you have.

6) You can use both your FHSA funds and $35,000 from your RRSP as part of the Home Buyers Plan for the same house purchase.

 

Is the FHSA right for me?

Give us a call to discuss!