- 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
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Trending searchesWhat 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.
Benefits of an FHSA
Any investment income earned within the FHSA is tax free.
Tax deductible contributions and non-taxable withdrawals.
Helps you save for a home down payment.
If you do not use the FHSA to purchase a home, investments can be transferred to an RRSP.
How much can I contribute to an FHSA?
* You can contribute up to $8,000 per year, up to a lifetime limit of $40,000. Unused room carries over. Because of carry-forward limits, the maximum amount you can contribute in any single year is $16,000 (if you have $8,000 of unused room from the previous year, plus the new $8,000 annual limit).
Your contribution room starts once you officially open an FHSA account.
Contributing more than your allowed limit triggers a 1% per month tax on the excess amount until you withdraw or clear it.
Make the most of your FHSA
How would you like to open your FHSA?
Explore different ways to open and manage your FHSA.
Explore investment products for your FHSA
Your FHSA can contain a variety of investments, such as cash, mutual funds, and GICs. We can help you build an investment portfolio that’s right for you.
When you're ready to buy your home
We have offers and tools to help you get started.
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Frequently asked questions
A First Home Savings Account (FHSA) is a registered savings plan designed to help eligible first-time home buyers save to buy or build a qualifying first home tax-free.
Contributions to an FHSA are tax-deductible, similar to a Registered Retirement Savings Plan (RRSP), while any investment growth and qualifying withdrawals used to purchase a first home are non-taxable, like a Tax-Free Savings Account (TFSA).
To make a tax-free withdrawal, specific conditions must be met. For eligibility details, visit the Canada Revenue Agency website.
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 $60,000 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? | Yes2,3 | Yes | No | Yes4,5 |
| Max contribution limit? | $8k per year until $40k max3,6 | Subject to Canadian Revenue Agency (CRA) regulations | Subject to CRA's regulations | n/a |
| Deadline to close account? | December 31 of the year of the account’s 15th anniversary or when the plan holder turns 71, whichever happens first.2 The 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 |
Not sure if this is right for you?
This account might not be right if you:
Resources
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The Scotiabank Savings Accelerator Account may be opened within the following registered investment accounts - TFSA, RRSP, RESP, RRIF and RDSP.
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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.
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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.
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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.
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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.
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HBP will continue to be available, under which an individual may withdraw up to $60,000 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. First-time home buyers who withdraw money from their RRSPs between January 1, 2022, and December 31, 2025, will have five years instead of two, to begin repayments over a period not exceeding 15 years.
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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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Registered trademarks of The Bank of Nova Scotia, used under licence. Scotiabank includes The Bank of Nova Scotia and its subsidiaries and affiliates, including Scotia Securities Inc.
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If you over-contribute to your FHSA, then the excess amount will be taxed at 1% for every month it’s in your FHSA.
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Minimum transfer required. Full terms and conditions can be found here
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.
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Conditions apply. For full details, visit www.scotiaitrade.com/winter