First Home Savings Account (FHSA)
The best of both worlds.
The Limit
Always check your CRA My Account for your exact personal limit. Over-contributing attracts penalties!
Quick Room Check
Check your CRA My Account for the exact total.
The Tax Vibe
Tax deductible in (like RRSP). Tax-free out (like TFSA) if used for a home.
Best Used For...
- Buying your first home (approx. 5-15 year horizon)
Description
Ideally used for buying a home. If you don't buy a home, you can roll it into your RRSP without using RRSP contribution room. It's basically free tactical space.
The Best of Both Worlds
You get the tax deduction of an RRSP and the tax-free withdrawal of a TFSA (if used for a home). It is the single best account for aspiring homeowners.
The Rollover
If you don't buy a home within 15 years, you can transfer the funds directly into your RRSP. This does NOT use up your RRSP contribution room. It effectively creates $40,000 of extra RRSP room.
Carry Forward limit
Unlike the TFSA, you can only carry forward up to $8,000 of unused room to the next year. You cannot stack up years of room indefinitely. Open the account to start the clock!