What is an FHSA?
An FHSA is a new registered plan that lets you save tax-free for a down payment on your first qualifying home.
FHSA benefits
Tax-deductible contributions
FHSA contributions are eligible for a tax deduction, which reduces your taxable income for the current year or a future one.
Tax-free earnings
Investment income grows tax-free.
Tax-free withdrawals
You can withdraw your money tax-free to buy your first qualifying home.
FHSA explained
FHSA eligibility
You can open an FHSA if:
- You're 18 or older (not more than 71 on December 31)
- You're a Canadian resident
- You or your spouse or common-law partner didn't own a primary residence you were living in the year before the account was opened or during the previous 4 calendar years
FHSA contribution limit
Your contribution room is $8,000 per year, up to a lifetime limit of $40,000.
If you contribute less than the annual limit, you can carry forward the unused room (maximum $8,000) to the following year.
So each year, you can use up to $8,000 of the unused portion, up to a maximum annual contribution of $16,000.
FHSA contribution deadline
The deadline is December 31 of the tax year. You can deduct your contributions on your tax return the year you make them, or later on to take advantage of the tax deduction in a future year.
When to close an FHSA
You must close your FHSA by one of the following dates, whichever comes first:
- December 31 of the year you turn 71
- December 31 of the year of the 15th anniversary of opening your FHSA
- December 31 of the year following your first qualifying withdrawal
Good to know
Are you already contributing to an RRSP? You can transfer some of this money to an FHSA tax-free if you don't exceed your FHSA contribution room. If you're saving up for a home and you meet the eligibility requirements, this new plan might be the best option for you.
Keep in mind that you won't get RRSP contribution room back for this transferred amount or receive another tax deduction.
Qualified investments for an FHSA
Find out which investments you can hold in your FHSA.
Desjardins Funds
Invest in innovative and competitive fund portfolios tailored to your profile.
FHSA – Savings Account
Grow your money quickly with no fees to buy your first home.
Guaranteed fixed-rate investments (term savings)
Enjoy a known return on your investment from day one. Both your principal and interest are guaranteed.
Market-linked guaranteed investments
Harness the growth potential of stocks without risking your capital.
Interested in self-directed investing?
Whatever your level of investment knowledge, we offer everything you need to make informed decisions and invest on your own with confidence:
- No-fee online transactions for stocks and exchange-traded funds (ETFs)
- State-of-the-art trading platforms
- Comprehensive training
- Powerful analysis tools
FHSA or HBP: Which one to choose?
You can use your FHSA and HBP together to make a down payment on your first home, or choose the one that's best for your needs and goals.
FHSA
You can withdraw all your contributions (lifetime limit of $40,000) and the accumulated investment income from your FHSA to buy a qualifying home.
Withdrawal taxes
You won't be taxed on the amount withdrawn if you use it to buy a first qualifying home.
Repayment
You don't have to pay back the amount withdrawn from your FHSA.
HBP
You can withdraw up to $60,000 from your RRSP to buy a qualifying home.
Withdrawal taxes
You won't be taxed on the amount withdrawn if you pay back the required amount each year to your RRSP.
Repayment
You have 15 years to pay back the amount withdrawn from your RRSP. You must start your repayments during the fifth year after the withdrawal.
FAQ
Is there a penalty if I exceed my FHSA contribution limit?
Yes. A 1% tax on excess contributions to an FHSA would apply each month. You can remove this penalty by withdrawing the excess amount. Otherwise, the excess amount is deducted from your contribution limit for the following year.
What happens to my FHSA if I don't use it?
If you don't use the funds in your FHSA, you can choose to:
Transfer the money to a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF), without affecting your RRSP contribution room and without paying tax the year of the transfer
Withdraw the money and pay the tax on that amount
Can I contribute to my child's or spouse's or common-law partner's FHSA?
No. You can't directly contribute to another person's FHSA. However, you can personally give money to your child or spouse or common-law partner so they can contribute to their FHSA.
In all cases, only the FHSA's holder can make contributions and claim tax deductions for those contributions. In addition, investment income generated in the FHSA will not go to the person who gave money to the account holder.
Do I have to deduct my contributions on my tax return the same year they're made?
No. You don't have to deduct contributions for the year that you make them. This means that contributions you make during a year you're earning a lower income could be used to reduce your taxable income for a year you're earning a higher income.
For example, a student with a part-time job can contribute $1,000 to their FHSA but wait until they have a higher salary after they graduate before applying the corresponding deduction. They could then get better tax savings.
Can I combine my FHSA with my spouse's or common-law partner's FHSA to buy a qualifying home?
Yes, you can combine your FHSA funds to buy a first qualifying home.
Can I withdraw more than $40,000 from my FHSA?
Yes, you can withdraw more than $40,000 from your FHSA. Depending on your investment strategy and resulting gains, you may be able to withdraw more than your total contribution amount if your investment does well. Also, any investment income generated in your FHSA is tax-free.
Contribute to your FHSA
By phone
1-800-224-7737 This link opens your phone app. (1-800-CAISSES)
We can also call you when it's convenient.
How to contribute to the FHSA
1. Open the FHSA online
Log in to AccèsD to open your FHSA and start contributing.
Not a Desjardins member or prefer some help with your investment plan?
Montreal area: 514-224-7737 This link opens your phone app. (514-CAISSES)
Elsewhere in Canada: 1-800-224-7737 This link opens your phone app. (1-800-CAISSES)
2. Choose your investments
Choose the right investments for you according to your savings goals and investor profile.
3. Start contributing
Contribute to your FHSA now or set up automatic transfers to take the work out of saving.