What is the First Home Savings Account and how does it help Ontario buyers?

The First Home Savings Account (FHSA) is a registered savings plan introduced by the federal government that allows eligible first-time buyers to save toward a qualifying home purchase on a tax-advantaged basis. Contributions are tax-deductible (like an RRSP), and qualifying withdrawals to purchase a first home are tax-free (like a TFSA).

You can contribute up to $8,000 per year, with a lifetime maximum of $40,000 per account holder. The FHSA is a federal program administered by financial institutions, so it applies across Canada, including Ontario. To open an FHSA, you must be a Canadian resident, at least 18 years old, and a first-time buyer as defined by the federal Income Tax Act — meaning you have not owned a qualifying home that you lived in at any time during the current calendar year or the preceding four years.

Withdrawals to buy a qualifying home are tax-free. If you do not use the funds to buy a home, you can transfer the balance to an RRSP or RRIF without affecting your contribution room.