Maple News reports that the First Home Savings Account (FHSA), introduced by the Government of Canada in 2022, offers an accessible and tax-advantaged way for new Canadians and other qualifying residents to save for their first home. Designed with flexibility and accessibility in mind, the FHSA combines key benefits of other registered accounts to support Canadians on their journey to homeownership.
The FHSA allows eligible individuals to contribute up to $8,000 annually, with a lifetime contribution limit of $40,000. Contributions are tax-deductible, and when the funds are used toward purchasing a qualifying first home, both the savings and investment earnings can be withdrawn tax-free. This makes the FHSA a powerful tool for those planning to enter the housing market, particularly newcomers who are balancing early financial goals with the challenges of settling in a new country.
To open an FHSA, applicants must be Canadian residents, at least 18 years old (or the age of majority in their province), have a valid Social Insurance Number, and qualify as first-time home buyers. “First-time” means they haven’t lived in a home they owned in the current year or any of the previous four calendar years.
Compared to other savings vehicles, the FHSA offers distinct advantages. While the Registered Retirement Savings Plan (RRSP) provides an option to borrow up to $60,000 through the Home Buyers’ Plan (HBP), those funds must be repaid within 15 years. In contrast, FHSA withdrawals used to buy a qualifying home do not require repayment and are not taxed. Meanwhile, a Tax-Free Savings Account (TFSA) allows tax-free withdrawals for any purpose, but contributions are not tax-deductible. The FHSA uniquely blends the most beneficial features of both.
Newcomers to Canada have several account options, depending on their investment preferences. These can include multi-holding accounts—offering cash, mutual funds, and GICs in one plan—or self-directed investing accounts that give investors access to a broader array of financial products. Personal bankers at major institutions can help identify which structure best fits an individual’s comfort level and financial objectives.
While the FHSA is available through various financial institutions, some, like TD Bank, also offer specialized support for newcomers. With over 150 years of experience in serving Canadians and extensive resources for new immigrants—including multi-language services and extended branch hours—banks with tailored programs can simplify the transition into the Canadian financial system.
Opening an FHSA typically requires basic personal identification, proof of Canadian residency, a Social Insurance Number, and the completion of a simple application process. As homeownership remains a top priority for many newcomers, the FHSA stands out as a practical, efficient, and supportive tool in making that dream a reality.
According to Maple News, the FHSA is more than just a savings account—it’s a strategic stepping stone for newcomers in Canada looking to plant long-term roots through homeownership.