First Home Savings Account (FHSA)

There’s a home out there just for you. Make it yours with the First Home Savings Account. Now available at Scotiabank.^‡

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Special Offer

For a limited time, earn an interest rate of 5.00% on new FHSA deposits with the Savings Accelerator Account.^†

What is an FHSA?

This new account is a great savings vehicle for your homebuying goals because you never pay a tax bill on these savings.*

It's the best part of both a Registered Retirement Savings Plan (RRSP), which gives you tax-deduction perks, and a Tax-Free Savings Account (TFSA), which lets your investments grow without a tax bill. This means that the money you put in and earn in this account goes towards the down payment of your first home.

Why invest in an FHSA?

The First Home Savings Account (FHSA) is a registered investment account that can help Canadians contribute up to $40,000 for their first home.

Any growth from your investments is tax-free. Contributions you make to your FHSA can also reduce your taxable income.*

What are the contribution limits?

Every year you gain contribution room in your FHSA. As of January 2023, you can contribute $8,000 annually in your FHSA. However, it’s important to make sure you don’t over-contribute.^††

Who’s eligible for the FHSA?

There are three important components to qualify for this investment vehicle:

You need to be a resident of Canada
You have to be at least 18 years of age (or the age of majority in your province or territory)
You or your spouse can't own a home in which you lived, at any time in the year the account is opened or during the previous four calendar years

Is this Registered Plan right for you?

Right for you if you:

Are a Canadian Resident
Have reached the age of majority in the province where the account is set-up
Are a First Time Home Buyer
Want your savings to grow over time with the ability to withdraw all of the funds tax-free to buy your first home

May not be right for you if you:

Are not a first-time home buyer*
Are not a Canadian Resident
Are turning 72 this year -since you can only hold and contribute to a FHSA until the year in which you turn 71

Frequently Asked Questions

If you fit the three requirements, you likely qualify. But if you are looking to buy a second home or a new home as a previous homeowner, this account isn't for you.

You are considered a first-time homebuyer, for the purposes of this plan, if you haven’t owned a home within the last four calendar years.

For example, if you bought your first home in 2015 and sold it in 2018 and have been renting or living with parents or a non-spouse ever since, you would be considered a first-time homebuyer again.

If you don't use your FHSA to buy a home, you can transfer the funds to an RRSP account anytime within 15 years or at the time you need to close your account. The transfers will not impact your RRSP’s contribution room.

Alternatively, you can withdraw the amount, but the funds would be subject to withholding taxes.

If you are planning to buy a home in the next few years and don’t have enough time to earn the maximum amount of $40,000 in the FHSA, you still could still use your savings from the account in combination with the other new tax proposals.

The federal government also announced that the First-Time Home Buyers' Tax Credit will increase to $10,000, which provides up to $1,500 in direct homebuyer support.^**

Plus, the First-Time Homebuyer Incentive, which allows new owners to lower their monthly payments, has been extended until March 31, 2025.

The FHSA in Canada is the best of both worlds.

Like your TFSA, the maximum contribution of $40,000 ($8,000 each year) will compound and grow tax-free. But unlike the TFSA, you don't have the same flexibility for how you will use your savings.

The FHSA has to be devoted to the purchase of your first home. Any withdrawals not related to buying a home, will not meet the criteria of a qualifying withdrawal, and therefore will be taxed.

Right now, you can withdraw up to $35,000 of your RRSP towards a new home (called the Home Buyers’ Plan) tax free. The catch is that with the RRSP, you have to pay that money back within 15 years. With the FHSA, you won't need to replace those funds.

Take a look at the breakdown on how these accounts work.

	FHSA	TFSA	RRSP	RRSP - Home Buyers’ Plan
Who qualifies for the account?	Any Canadian resident over 18 years old (or age of majority in your province), as long as they haven’t owned a home in the current year or previous 4 years	Any individual 18 years old (or age of majority in your province) or older who has a valid social insurance number (SIN)	Any Canadian resident or non-resident under the age of 71¹	Any Canadian resident under the age of 71¹
Tax-deductible contributions?	Yes	No	Yes	Yes
Tax-free withdrawals?	Yes^2,3	Yes	No	Yes^4,5
Max contribution limit?	$8k per year until $40k max^3,6	Subject to Canadian Revenue Agency (CRA) regulations	Subject to CRA's regulations	n/a
Deadline to close account?	December 31of the year of the account’s 15^th anniversary or when the plan holder turns 71, whichever happens first.²The account must also be closed within one year of the first qualifying withdrawal.	n/a	December 31 of the year you turn 71 is the last day you can contribute to the account	n/a

Building your FHSA

Special offer

Savings Accelerator Account

For a limited time, earn an interest rate of 5.00% on new FHSA deposits with the Savings Accelerator Account.^†

Accelerate your savings

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How to save for a down payment towards a home as a newcomer

New to Canada and want to buy a home? Here's how to save for your down payment.

Understanding FHSA contribution limits

How you can use the FHSA properly to save toward your first home.

How the Home Buyers' Plan (HBP) can help you become a homeowner

Learn how the Home Buyers' Plan lets you use your RRSP to help pay for your first home.

Resources

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Additional information

FHSA Resource
N/A | pdf : 151 KB

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Terms and conditions

†

The bonus interest rate (The “Bonus Rate”) applies to New Deposits (defined below) made into an eligible Scotiabank Savings Accelerator Account (“SSAA”) between August 14, 2023 and January 31, 2024 (the “Bonus Rate Period”). Eligible SSAAs include only those held within a First Home Savings Account (FHSA) at either The Bank of Nova Scotia or Scotia Securities Inc. (together, “Scotiabank”). SSAAs held within a TFSA, RRSP, RRIF, LIF, Registered Locked-In RSP, RESP, RDSP or any other registered plan or non-registered account at Scotiabank are not eligible for this Bonus Rate.

During the Bonus Rate Period, the Bonus Rate of 4.25% will be earned only on that portion of the SSAA Daily Balance that is greater than the SSAA Daily Balance as of August 13 2023 (“New Deposits”). The “SSAA Daily Balance” means, with respect to any particular day, the closing balance in the eligible SSAA. In addition, New Deposits will continue to earn interest at the posted annual interest rate for the SSAA (click here for current rates).

The Bonus Rate will cease to apply as of February 1, 2024. The bonus interest earned during the Bonus Rate Period will be calculated daily and paid monthly. All interest rates described herein are annual rates.

SSAAs must be open and in good standing in order to receive any interest calculated at the Bonus Rate. A SSAA is not in 'good standing' if it has a negative balance, or the account holder is in breach of the account agreement with Scotiabank.

It is the SSAA account holder’s responsibility to determine his or her maximum allowable annual contributions in SSAAs held in registered plans.

All other terms and conditions of the SSAA continue to apply, refer to https://www.scotiabank.com/ca/en/personal/bank-accounts/savings-accounts/savings-accelerator-account.html for details, including calculation of interest.

By accepting this offer, you consent to receive messages from Scotiabank via e-mail, Scotia OnLine and/or the Scotiabank Mobile Banking App so that we can notify you when the Bonus Rate Period and the offer are expiring and what interest rate will take effect after the Bonus Rate Period expires. Should you ever need to change your email address, you can update it by calling us or going into a branch.

These offer terms, including the Bonus Rate, may be changed, cancelled or extended at any time, in whole or in part, without notice.

Scotia Securities Inc. is a mutual fund dealer and is a corporate entity, separate from, although wholly-owned by, The Bank of Nova Scotia ("Scotiabank"). ScotiaFunds are managed by 1832 Asset Management L.P. and are available from Scotia Securities Inc. 1832 Asset Management L.P. is a limited partnership the general partner of which is wholly-owned by Scotiabank. Scotia Smart Investor is a trade name of Scotia Securities Inc.

If you remove funds from the FHSA for any reason other than for a qualifying home purchase, you will have to pay taxes. You will be considered to be a first time home buyer if you did not, at any time in the current calendar year before the account is opened or at any time in the preceding four calendar years live in a qualifying home as your principal residence that either you or your spouse or common law partner owned or jointly owned.

††

If you over-contribute to your FHSA, then the excess amount will be taxed at 1% for every month it’s in your FHSA.

First-Time Home Buyers’ Tax Credit (HBTC), Government of Canada

You must be considered a first-time home buyer, you must have a written agreement to buy or build a qualifying home, either for yourself or for a related person with a disability, you must be a resident of Canada when you withdraw funds from your RRSPs under the HBP and up to the time a qualifying home is bought or built and you must intend to occupy the qualifying home as your principal place of residence within one year after buying or building it.

After making a withdrawal to purchase a home, an individual will be required to close their FHSAs within one year and will not be permitted to open another FHSA.

A customer along with their spouse or common law partner can use their TFHSA towards the purchase of the same house if they both meet the first-time house buyer criteria.

This applies to withdrawals made after March 19, 2019. Amounts withdrawn under the HBP must be repaid to an RRSP over a period not exceeding 15 years, starting the second year following the year in which the withdrawal was made.

HBP will continue to be available, under which an individual may withdraw up to $35,000 tax free from an RRSP to purchase or build a home, on the condition that amounts withdrawn be repaid to the RRSP over a period not exceeding 15 years.

Individuals would be allowed to transfer funds from an RRSP to an FHSA on a tax-free basis, subject to the $40,000 lifetime and $8,000 annual contribution limits. These transfers would not restore an individual’s RRSP contribution room.

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