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Self-directed First Home Savings Account (FHSA)
Buying your first home is a major milestone and a self-directed FHSA from TD Direct Investing can help in achieving it.
What is a First Home Savings Account (FHSA)?
An FHSA is an account designed to help first-time homebuyers save for a qualifying first home, tax-free, up to certain limits. Whether you're building or buying, grow your savings faster with tax-deductible1 contributions.
FHSA contributions and timelines
|
$40,000 |
The maximum lifetime contribution limit4. |
|---|---|
|
$8,000 |
The yearly tax-deductible limit. |
|
15 years or until age 71 or the year following a qualifying withdrawal |
The latest time this account can stay open, whichever comes first. |
|
1 year |
The carry-over period for the previous year's unused contribution to a maximum of $8,000. |
Comparing FHSA to RRSP and TFSA at TD Direct Investing
The FHSA is a registered plan that combines some features of a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA) to help you save for your first home.
FHSA |
RRSP |
TFSA |
|
|---|---|---|---|
How does it help me buy a house? |
You can use the funds in your FHSA to purchase your first home. |
You can withdraw RRSP funds (up to $60,000) towards your qualifying home purchase under the Home Buyers’ Plan (HBP)5. |
You can use funds from your TFSA to purchase a home. |
What is the maximum contribution for 2024? |
$8,000 (carry-forward rules apply)6. The total contribution room at any given time cannot exceed $16,000. |
18% of last year's income up to $31,5607(you can carry forward unused contribution room from previous years). |
$7,000 (unused contribution room can be carried forward and amounts withdrawn may be recontributed in a subsequent year). |
Can I carry forward unused contributions? |
Yes, only the previous year's unused contribution up to $8,000. |
Yes. |
Yes. |
What is the maximum lifetime contribution? |
$40,000 over 15 years.
|
N/A |
N/A |
What are the eligibility requirements for opening an account at TD Waterhouse? |
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|
|
Will I get a tax deduction on eligible contributions? |
Yes, except for transfers into your FHSA from your RRSP, although these transfers still reduce FHSA contribution room. |
Yes, except transfers into your RRSP from your FHSA. (these transfers do not reduce RRSP contribution room). |
No. |
Do I need to repay the funds I use to buy a home? |
No. |
Yes, within 15 years. |
No. |
Can I invest using Canadian and U.S. currency? |
No, Canadian only. |
Yes. |
Yes. |
Are there conditions for making a withdrawal to purchase a qualifying home? |
Yes, you must use the funds to buy or build your first home. See Canada Revenue Agency (CRA) website for complete details. |
Yes, under the HBP. See CRA website for complete details. |
N/A |
How can I fund my TD Direct Investing accounts? |
With cash contributions and in-cash transfers only8. |
With:
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With:
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More investment choices
Got questions? We have answers.
Yes, you can. The funds will be processed as a direct transfer from your RRSP to your FHSA. The amount you can transfer will be subject to your FHSA annual contribution limit, including any carry forward. The transfer amount will impact your FHSA contribution room.
Funds withdrawn from your FHSA that are not a qualifying withdrawal for the purpose of a qualifying home are subject to income tax9.
Alternatively, any balance in your FHSA can be transferred, tax-free, to your RRSP or RRIF. Transfers from your FHSA to your RRSP or RRIF do not impact your available RRSP contribution room.
To complete a qualifying, tax-free withdrawal from your FHSA, you must meet the following criteria:
- You must be a first-time homebuyer and a resident of Canada at the time of the withdrawal for the acquisition of your qualifying home.
- A "qualifying home" is defined as a housing unit located in Canada. It also includes a share of the capital stock of a cooperative housing corporation, where the holder of the share is entitled to possession of a housing unit located in Canada.
- You must have a written agreement to buy or build a qualifying home located in Canada before October 1 of the year following the year of withdrawal.
- You must also intend to occupy the qualifying home as your principal place of residence within one year of buying or building it.
- You must not have acquired the Qualifying home more than 30 days before making the Withdrawal.
Note: You will need to fill out the following form and submit to a TD Canada Trust branch:
Yes, you can. With the HBP, you're essentially borrowing money from your RRSP to help buy or build your first home; however, there are repayment requirements to consider.
For both, you must qualify as a first-time home buyer to withdraw the money and meet other conditions. If you and your spouse both qualify, you can access funds from both HBPs and FHSAs.
In an FHSA, you can hold a variety of investments similar to those allowed in other registered accounts. These include:
- Stocks
- Mutual funds
- Exchange-traded funds (ETFs)
- Guaranteed Investment Certificates (GICs)
- Certain bonds
No, the FHSA cannot be held jointly. Although, if you and your spouse both qualify, you have the ability to combine individual FHSA savings to purchase a qualifying home.
Currently, you can only make these in Canadian cash. There are no in-kind contributions, transfers, or withdrawals.
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