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It's official... the new Tax-Free First Home Savings Account (FHSA) is coming! Launch date is yet to be confirmed but rumour has it to be April 1, 2023.  Here is what we know so far, please speak to your Financial Advisor for any updates.

What is the FHSA?

  • save up to $40,000 on a tax-free basis
  • annual contribution limit $8,000
  • like an RRSP, contributions are tax-deductible
  • withdrawals to purchase a first home are non-taxable, like a TFSA
Opening & Closing Accounts

  • must be Canadian resident 18+
  • must be a first time home buyer
  • FHSA ceases to be an FHSA & not permitted to open FHSA after Dec 31st in the year that one of the following occurs: 1) 15th anniversary of opening the account or 2) individual turns 71
  • any savings not used to purchase home transfers tax-free into an RRSP or RRIF or withdrawn on taxable basis
  • un-withdrawn savings remaining after qualifying withdrawal can transfer tax-free to RRSP or RRIF until Dec 31 of the year following the withdrawal

Qualified Investments

  • can hold the same qualified investments that are currently allowed to be held in TFSA


  • lifetime $40,000
  • annual $8,000 - only for the year in which it is made
  • contributions made after qualifying withdrawal are not tax-deductible
  • undeducted contributions may be carried forward indefinitely and deducted in a later tax year

Qualifying Withdrawals

  • non-taxable withdrawal
  • must be a FTHB at time of withdrawal - “not owned a home in which they lived at any time during the part of the calendar year before the account is opened or at any time in the preceding four calendar years”
  • home must be located in Canada
  • may withdraw full amount at once or in series of withdrawals - doesn’t have to be repaid like under the HBP

Non-Qualifying Withdrawals

  • taxable as income
  • financial institution would be required to collect & remit withholding tax
  • doesn’t reinstate annual or lifetime contribution limits


  • from FHSA to FHSA, RRSP or RIF tax free
  • funds subject to usual rules applicable to the receiving accounts
  • does not reduce nor is limited by RRSP contribution room
  • does not reinstate FHSA lifetime contribution limit
  • can transfer from RRSP to FHSA tax free - subject to FHSA contribution limits, not tax deductible, doesn’t reinstate RRSP contribution room

Interaction with the Home Buyers Plan (HBP)

  • HBP continues as usual
  • can withdraw under both FHSA & HBP for the same qualified home purchase

Spousal Contributions & Attribution Rules

  • FHSA holder is only one who can claim tax deductions made to their FHSA
  • you may contribute to your spouse’s FHSA (no tax deduction) without any attribution rules

Marital Breakdowns

  • proposed that an amount may be transferred directly from FHSA of one party to the relationship to an FHSA, RRSP or RRIF of the other
  • no tax consequence in this circumstance

Treatment Upon Death

  • like TFSAs can designate spouse or common-law partner as successor, account retains tax-exempt status
  • successor must be eligible to open FHSA or have FHSA, doesn’t impact successors contribution limits 
  • if successor not eligible for FHSA then can transfer to RRSP, RIF or withdrawn on taxable basis
  • if successor is not spouse or common-law partner then funds withdrawn & paid to beneficiary, considered income to beneficiary & subject to withholding tax 


  • tax payers may contribute to existing FHSA after emigrating from Canada but can’t make qualifying withdrawal as non-resident 
  • withdrawals subject to withholding tax




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