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RBC Dominion Securities Inc.
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Online Banking
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About Us
Meet Our Team
Our Approach
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Helping You Through Any Life Stage
Research
Resource Centre
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Health Care Professionals
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Financial Literacy Program
Online services
Contact Us
The First Home Savings Account (FHSA) is here!
The First-Home Savings Account (FHSA) is now live! This new type of registered account was introduced in the 2022 Federal Budget, and can now be opened for qualified first-time home buyers across Canada. The full annual contribution amount is available for 2023.
What is the FHSA?
A new registered account to help individuals save up to
$40,000
on a tax-free basis to purchase their first home
Contributions made to a FHSA are tax-deductible (like an RRSP), and withdrawals (including investment income earned) to purchase your first home are tax-free (like a TFSA)
The FHSA
can
be used in conjunction with the RSP Home Buyers’ Plan for a qualifying home purchase
Who can open a FHSA?
You must be a resident of Canada, at least 18 years of age, and not turning age 72 or older in the current year
You must be a
first-time home buyer
. A first-time home buyer is defined as someone who, along with their spouse, has not owned a home that has been lived in as the primary residence at any time during the calendar year, or in the four preceding calendar years
How does the FHSA work?
You will be able to contribute
$8,000
annually to your FHSA, with a lifetime limit of $40,000
You will be able to carry-forward your unused annual contribution limit, up to a maximum of $8,000. For example, if you contribute $5,000 in 2023, you will be allowed to contribute $11,000 in 2024 ($8,000 for 2024 + $3,000 remaining from 2023)
You will be able to claim a deduction for contributions made during the current calendar year (like an RRSP), or carry-forward undeducted contributions indefinitely for a later year
Qualifying withdrawals can be made from the FHSA on a tax-free basis. Non-qualifying withdrawals are subject to withholding tax, and will also be included in income for the year
If you are not able to use the funds in your FHSA to purchase a qualified home, you can transfer into your RRSP or RRIF on a tax-free basis
This is a great structure for those savings towards their first home, as well as an opportunity to gift funds to family members without income attribution. We encourage you to share this with any friends or family members who would benefit from this new account. The FHSA is currently not available at regular bank branches.