Here are 3 things Canadians should know about the First Home Savings Account

Starting the journey of saving towards first-time home ownership is exciting, but it can also get kind of overwhelming. There’s a lot to think about — Where should you save? What kind of savings account should you open?

The good news is TD has recently launched the First Home Savings Account (FHSA), which is a registered account designed to help first-time Canadian homebuyers with the saving process as they approach the big purchase.

Here’s what first-time home buyers need to know about the new registered savings plan.

What is an FHSA?

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A First Home Savings Account (FHSA) is a type of registered savings plan that was introduced by the federal government in 2023.

It is designed to help you save for your first home tax-free and reach your investment goals more quickly. To be eligible, you must be a Canadian resident, aged¹, and a first-time home buyer.²

How it works

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An FHSA combines some of the features of a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA).

Similar to an RRSP, contributions will generally be tax-deductible. And like TFSA withdrawals, when a qualifying withdrawal is made to purchase a qualifying home, the amount withdrawn (including any income or gain) is not taxable.³

Annual contributions are capped at $8,000, up to a $40,000 lifetime contribution limit per individual. A maximum of $8,000 in unused contribution room can carry forward to the next year.

The account can stay open for a maximum of 15 years⁴ — until the end of the year you turn 71 or until December 31 of the following year after your home’s purchase, whichever comes first.

How to get started

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FHSAs can become an important part of a first-time homebuyer’s savings strategy. Customers can help eliminate the guesswork by booking an appointment with a TD Personal Banker and create their home purchase goal using the TD Goal Builder.

You can also use TD’s Mortgage Affordability Calculator to find out what down-payment value will be most comfortable and attainable for you.

For more information about the First Home Savings Account click here, or book an appointment with a TD Personal Banker today.

<sup>1. In certain provinces and territories, the legal age at which an individual can enter into a
contract including opening a FHSA is 19. You must be at the age of majority in your province of residence and provide a valid Social Insurance Number (SIN). FHSA cannot be opened after the end of the year you turn 71.
2. An individual is considered to be a first-time home buyer if at any time in the part of the
calendar year before the account is opened or at any time in the preceding four years they did not live in a qualifying home (or what would be a qualifying home if located in Canada) that either (i) they owned or (ii) their spouse or common-law partner owned (if they have a spouse or common-law partner at the time the account is opened).
3. For a qualifying FHSA withdrawal, you must be a first-time home buyer; you must have a written agreement to buy or build a qualifying home with the acquisition or construction completion date of the qualifying home before October 1 of the year following the date of the withdrawal; you must not have acquired the qualifying home more than 30 days before making the withdrawal; you must be a resident of Canada from the time that you make your first qualifying withdrawal from one of your FHSAs until the earlier of the acquisition of the qualifying home, or the date of your death; you must occupy or intend to occupy the qualifying home as your principal place of residence within one year after buying or building it.
4. Based on the date on which the first FHSA is opened.</sup>

This article has been sponsored by TD.