A First Home Savings Account (FHSA) is a registered plan specifically designed for first-time homebuyers, allowing them to save for a qualifying first home in a tax-efficient manner. Contributions made to an FHSA can be deducted as an FHSA deduction on your income tax return, providing potential tax benefits.

For example, if you opened an FHSA in 2024, you can claim up to $8,000 in contributions made by December 31, 2024, as a deduction on your 2024 income tax return. This unique account structure combines the advantages of tax-deferred growth and tax-free investment earnings, making it an attractive option for individuals looking to save for their first home. Participants can contribute or transfer funds to their FHSA, with the ability to carry forward unused FHSA participation room. Transfers into an FHSA can be made directly, and withdrawals can be utilized for purchasing a qualifying home or other purposes, with considerations for tax consequences.

Investments within an FHSA can include GICs, GIFs, mutual funds, segregated funds, stocks, and bonds, with considerations for taxes payable on certain investments FHSA offers a structured and tax-efficient approach for first-time homebuyers to save for their future home purchase, with guidelines and tools available to facilitate the process and maximize savings potential.