First Home Savings Account: A Guide to Getting Started

Congratulations on considering a First Home Savings Account (FHSA) to help you buy your first home! This tax-free savings account is specifically designed for first-time homebuyers in Canada, allowing you to save up to $35,000 for a down payment.

You can contribute up to $5,000 per year to an FHSA, and the government will match your contributions with a 15% tax credit.

You're considering setting up a First Home Savings Account (FHSA) to save for your first home, and you're wondering about the benefits of an Andro. An Andro is a type of savings account specifically designed for first-time homebuyers.

An Andro is a registered retirement savings plan, but it's used for a down payment on a home instead of retirement savings. This means your money can grow tax-free, just like in a traditional RRSP.

The government offers a 15% refund of your contributions, up to a maximum of $8,000, which can significantly boost your savings. This refund is non-taxable, so you can keep the entire amount.

This refund can be used towards your down payment, closing costs, or other expenses related to buying your first home.

Contributions to an FHSA are capped at $8,000 per year, with a lifetime limit of $40,000.

You can carry forward up to $8,000 of unused contribution room to the following year, so it's essential to track your contributions.

The account can stay open for a maximum of 15 years or until the end of the year you turn 71.

Here are the key contribution limits at a glance:

With an FHSA, you can save up to $8,000 per year, and a maximum of $40,000 over your lifetime.

You can carry forward up to $8,000 of unused contribution room to the following year, which is a great feature for those who don't quite reach the annual cap.

The account can stay open for a maximum of 15 years, or until the end of the year you turn 71.

Here are the key contribution limits at a glance:

To open a First Home Savings Account (FHSA), you must be a Canadian resident, have a valid Social Insurance Number, be 18 years or older, and be a first-time home buyer who has not used an FHSA in the past.

You can open an FHSA with various institutions, such as Vancity or TD, which offer competitive interest rates and socially responsible investing options. Some institutions, like Foyer, also offer a user-friendly account setup process that can be completed in just 5 minutes.

In Canada, the qualified investments for an FHSA are the same as those for a Tax-Free Savings Account (TFSA), which include mutual funds, publicly traded securities, government and corporate bonds, and guaranteed investment certificates (GICs).

You can also transfer funds from your Registered Retirement Savings Plan (RRSP) to your FHSA on a tax-free basis, subject to FHSA annual and lifetime contribution limits. However, this will not restore your RRSP contribution room.

Here are the key account details you should know:

You can open a FHSA with various institutions, and some, like Foyer, offer a competitive Annual Percentage Yield (APY) and unique features, such as the Foyer Match, where they match your deposits at 2% or 5%.

To open an FHSA, you must meet certain qualifying criteria. You must be at least 18 years old.

Being a resident of Canada is also a requirement. You'll need to provide proof of residency to open the account.

To be considered a first-time home buyer, you must not have lived in a qualifying home that you owned or jointly owned in the past. This applies to the calendar year before the account is opened, or the preceding four calendar years.

The same rule applies to your spouse or common-law partner's ownership of a qualifying home. If they've owned a home in the past, it could affect your eligibility.

Here are the key eligibility criteria to keep in mind:

A first-time home buyer is someone who hasn't lived in a qualifying home they owned or jointly owned in the past.

You can deduct your FHSA contributions from your taxable income, which can save you taxes.

With an FHSA, you can reduce your taxable income, just like with an RRSP. However, you don't have to deduct your contributions within the same year you make them.

Investment income you make through your FHSA won't be taxed if you use the funds to buy or build your first home.

Qualified withdrawals from your FHSA to buy a home won't be taxable. This means you can withdraw money from your FHSA, tax-free, for your first home purchase.

If you qualify to use your savings towards the purchase of a qualifying home, you can withdraw money from your FHSA, tax-free. For the same home purchase, you may also be able to withdraw money from your RRSP Home Buyers' Plan.

Here's a comparison of FHSAs and RRSPs:

To open a First Home Savings Account (FHSA), you must meet certain eligibility criteria. You must be a Canadian resident, have a valid Social Insurance Number, and be at least 18 years old.

You can carry forward unused contribution room from one year to the next, up to a maximum of $8,000. This can be especially helpful if you don't use up your entire contribution limit in a given year.

Here are the key eligibility criteria for opening an FHSA:

The annual contribution limit for an FHSA is $8,000, which includes any transfers from an RRSP. You can carry forward unused contribution room up to a maximum of $8,000.

To be eligible to open an FHSA, you must meet certain criteria. You must be a Canadian resident, have a valid Social Insurance Number, and be at least 18 years old.

To open an FHSA, you'll need to meet all of the following qualifying criteria: be a resident of Canada, be 18 years of age or older, and be a first-time home buyer. To be considered a first-time home buyer, you must not have lived in a qualifying home that you owned or jointly owned at any time in the calendar year before the account is opened, or at any time in the preceding four calendar years.

You must also meet the age of majority in your province or territory, which is 18 in Alberta, Manitoba, Ontario, Quebec, Prince Edward Island, and Saskatchewan. This means you'll need to be at least 18 years old to open an FHSA.

Here are the key eligibility criteria to keep in mind:

By meeting these criteria, you'll be well on your way to opening an FHSA and starting to save for your first home.

The annual contribution limit for an FHSA is a crucial aspect to understand. You can contribute up to $8,000 per year. This includes any transfers from an RRSP.

To put this into perspective, let's say you contribute the maximum $8,000 in one year, but you can't use the full amount. You can carry forward the unused portion up to a maximum of $8,000 to the following year.

Here's a summary of the annual contribution limit:

It's essential to note that the annual contribution deadline is December 31, so make sure to deposit your contribution before then to have it deducted from your taxable income for that financial year.

You can withdraw money from your FHSA, tax-free, if you qualify to use your savings towards the purchase of a qualifying home.

One important thing to note is that you may also be able to withdraw money from your RRSP Home Buyers' Plan for the same home purchase.

If you don't buy a home, you'll need to consider the tax implications of your FHSA funds. Funds withdrawn from your FHSA that are not used to purchase a qualifying home are subject to income tax.

You might be wondering if there's a way to avoid this tax hit. One option is to transfer your FHSA balance to an RRSP or RRIF on a non-taxable transfer basis. This transfer does not impact your available RRSP contribution room.

Alternatively, you could consider transferring your FHSA balance to an RRSP or RRIF, which will allow you to delay paying taxes on the funds until you withdraw them. The funds transferred to an RRSP or RRIF will be taxed upon withdrawal.

RRSPs and TFSAs are two popular registered plans that can help you save money, but they have some key differences.

You can make tax-deductible contributions to both RRSPs and FHSA, but not to TFSAs.

One key difference is the primary purpose of each account. RRSPs are not primarily for saving for a down payment, though you can make an HBP withdrawal for that purpose.

The annual contribution limit for RRSPs is based on your personal income, with a maximum of $31,560 in 2024. In contrast, the annual contribution limit for TFSAs is $7,000 in 2024.

Unused contribution room in RRSPs carries forward, but the same is not true for TFSAs.

Here's a comparison of the lifetime contribution limits for each account:

Account withdrawals are taxed for both RRSPs and TFSAs, unless used for a home purchase through the HBP or a qualifying first-home purchase.

Using your First Home Savings Account (FHSA) effectively is key to reaching your home buying goals. Contribute regularly to your FHSA to benefit from both the Foyer Match and accrued interest.

Foyer matches deposits up to $10,000 per year in contributions, so aim to deposit at least this amount annually. Consistent contributions will help you grow your savings more effectively.

Foyer provides calculator tools to help you determine a realistic monthly savings target.

To use your FHSA effectively, start by contributing regularly to take advantage of the Foyer Match, which matches deposits up to $10,000 per year. Consistent contributions will help you grow your savings more effectively.

Aim to deposit at least $10,000 annually to maximize the Foyer Match, and consider setting up recurring transfers or direct deposits to ensure you never miss a contribution. This automated approach will help you reach your home buying target more efficiently.

To determine a realistic monthly savings target, use the calculator tools provided by your FHSA provider, such as Foyer, which take into account your budget, financial goals, and current situation.

You can also use the calculator to find the difference between your current home expenses and your estimated future home ownership cost, as mentioned in the TD Home Ownership Calculator.

To stay on track with your savings goals, set up automated transfers from your checking account to your FHSA, and consider setting up a separate savings account for your FHSA contributions.

Here are some options to consider when choosing an FHSA provider:

Choose an FHSA provider that fits your investment knowledge and comfort level, and consider the fees associated with trading and managing your portfolio.

The FHSA can be used in combination with other accounts and home-buying programs to help you save for a down payment on a home. You can use the FHSA with the Home Buyers' Plan (HBP), which allows you to borrow up to $60,000 from your RRSP.

Using both the FHSA and HBP, you can withdraw a total of $200,000, which is equal to a 20% down payment on a $1 million home. This is a significant amount, especially when you consider that HBP withdrawals are taxed if not repaid within 15 years.

Combining your FHSA with a TFSA can also boost the total amounts available for a down payment, as you can take advantage of tax-free investment growth in the FHSA and TFSA.

You can open a First Home Savings Account (FHSA) in just 5 minutes by visiting the Foyer website or downloading the Foyer app from the app store. After making your initial deposit of at least $100, you'll start earning interest and benefit from the Foyer Match right away.

To activate your FHSA, you'll need to deposit a minimum of $100 within the first 60 days of opening your account. This will also qualify you for an extra $100 in Foyer Rewards when you set up recurring or direct deposit.

If you're under 18 or not a resident of Canada, you won't be eligible to open an FHSA. You'll need to be 18 years of age or older and a resident of Canada to meet the qualifying criteria. Additionally, you must be a first-time home buyer, which means you haven't lived in a qualifying home that you owned or jointly owned in the past four years.

Here are the key details to keep in mind when creating and maintaining your FHSA:

Creating an account for your FHSA is a straightforward process. You can open a Foyer account in just 5 minutes by visiting the Foyer website or downloading the Foyer app from the App Store or Google Play Store.

To activate your Foyer account, you'll need to make an initial deposit of at least $100 within 60 days. This will also qualify you for an extra $100 in Foyer Rewards.

You can also open an FHSA with TD, which offers a variety of benefits. For example, individuals may claim an income tax deduction for eligible FHSA contributions.

The account setup process is quick and easy, and you can start earning interest and benefiting from the Foyer Match right away. With TD, you can also use their Goal Builder tool to define your investing goals and recommend products to help you reach your home ownership goals.

To get started with Foyer, simply visit their website or download the app, and you'll be on your way to saving for your dream home.

To create an account for an FHSA, you can start by visiting the Foyer website or downloading the Foyer app from the iOS App Store or Google Play Store. The account setup process takes just about 5 minutes.

To activate your Foyer account, you'll need to deposit a minimum of $100 within the first 60 days. This is a crucial step to start earning interest and benefiting from the Foyer Match right away.

You'll also need to meet certain eligibility criteria, which include being a Canadian resident, having a valid SIN, being 18 years or older, and being a first-time home buyer who has not used an FHSA in the past.

To be considered a first-time home buyer, you must not have lived in a qualifying home that you owned or jointly owned at any time in the calendar year before the account is opened, or at any time in the preceding four calendar years. The same applies to your spouse or common-law partner.

Here are the key requirements to keep in mind:

Questrade was the first company to launch an FHSA in Canada on April 1, 2023. Since then, more than 20 other financial institutions have followed suit.

Availability of FHSAs remains limited today, even at some of the large banks. You may have to speak with a representative in person to open an account.

The roll-out of FHSAs has been slower than anticipated. More institutions are expected to make their FHSAs available in 2024.

You can use both the FHSA and the Home Buyers' Plan (HBP) to make a qualifying home purchase. This rule was amended before the FHSA's official launch.

Contributions made to an FHSA during the first 60 days of the calendar year are not deductible on your income tax return for the previous year.