Yes it's not clear on the Government of Canada website because they haven't updated it yet!

Thank you for your support!

Thanks Yatin!

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Thank you for your support!

Thanks Auslander for the info - theoretically you can give your spouse the money personally to fill up their FHSA but unlike an RRSP you can't claim their room as a deduction. Source: www.desjardins.com/qc/en/tips/fhsa-frequently-asked-questions.html

Hi Jason, the FHSA account will be for primary residences, not investment or leisure properties. Source: ca.rbcwealthmanagement.com/irene.so/blog/3334617-What-is-the-First-Home-Savings-Account

Agreed! It's a great way to help your kids get started on saving for their first home

My question exactly, did you get an answer?

Even if you have a downpayment, it's still important to open the FHSA because any unused room can be rolled over into your RRSP for extra space. Don't hesitate - the deadline for opening a FHSA is end of this year!

Hey! It should be similar to the RRSP (not automatic), so for example, you contribute $8K this year to FHSA and you made $23K in income this year. You can deduct the contribution of $8K on your taxes so that your taxable income will be $15K ($23K-8K = $15K). Hope this makes sense!

Hi Sameh, this is what the Government of Canada site says: " 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 place of residence". It defines Qualifying Home as exisiting homes and those being constructed. I would speak with a financial advisor on this as well because technically you're a home owner on Jan 2023 if that's on your purchasing documents but the confusing part is you haven't 'lived in a qualifying home' as it was still under construction. Source: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/opening-closing-and-fhsa.html#h_1

Hi Abhiket, since this is a newer account there often isn't that much info released on it yet but on the Government of Canada website, it says: 1) "To open an FHSA, an individual must be a resident of Canada and at least 18 years of age." It doesn't indicate if you have to be Citizen or PR, but the way it reads to me sounds like Residents can qualify. 2) "You are not permitted to participate directly in your spouse’s or common-law partner’s FHSA. Your spouse or common-law partner is the only person who can participate in their own FHSA." 3) You don't have to wait 5 years, but if you do, that allows you to have the maximum space ($40K). If you put money in this year, you can only contribute $8K and when you buy the house and take out the $8K, it closes the account. Hope this helps!

It is mainly used for first home expenses but if you don't use the money at all, it can be transferred to your RRSP without using up your RRSP contribution limit

Hi Matthew, it depends on if your partner is a homeowner already or not. If they are then you can't use the FHSA, if you both are first time homebuyers then yes you both can use your FHSAs to contribute to a home.

Thanks! Yes the Government of Canada website needs the updated info about the HBP!

Hi Sanjeev, there shouldn’t be a minimum amount of time to leave the money in the FHSA

Similar to the RRSP there will be withholding taxes on the FHSA for US investments.

The FHSA is for people who haven't owned a home in the past 4 years - so if you've been owning that home for 5 years then you wouldn't qualify for the account. Source: www.cpacanada.ca/en/business-and-accounting-resources/taxation/blog/2022/november/faqs-tax-free-first-home-savings-account

If you purchased a home already , you would be considered a homeowner in which case I don't think the FHSA would apply if you're no longer a first time homebuyer

Hi Minnie, the current age limit is between 18 and 71 years old. No mention in the budget of the 40 year old age limit. Source: www.budget.canada.ca/2022/report-rapport/tm-mf-en.html#a2_1

Hey Megan! There isn’t a minimum number of months to keep funds in the FHSA but there is a maximum of 15 yrs you can keep funds in the account. Source: www.nbc.ca/personal/help-centre/savings-investment/saving-plans/fhsa-what-is-it-how-does-it-work.html

So I could open the account this year put $8k in and withdraw in the same year and buy this year some time then on tax season I can still claim $8k deduction ? Thanks

@@megansmith101 Hi Megan, yes you can claim the $8K deduction when you are filing the taxes that year. Source: "Your contributions made to an FHSA are tax deductible, which reduces your taxable income for the current year" from: www.nbc.ca/personal/savings-investments/fhsa.html#:~:text=Your%20contributions%20made%20to%20an,income%20for%20the%20current%20year.&text=If%20you%20decide%20to%20use,without%20affecting%20your%20contribution%20room.

So this is what the CRA says on their website: "If you become a non-resident of Canada after you open your FHSA, you can continue to participate normally in your FHSA, with one exception: You cannot make a qualifying withdrawal to build or buy a qualifying home while you are a non-resident of Canada." Where I think would be useful to speak to an accountant about is the 'participate normally' aspect - it seems like you're able to keep your FHSA open and continue to contribute to it but you can't take anything out until you move back to Canada. I wasn't able to find anything on the CRA website for whether you can still make a direct transfer from FHSA to RRSP although you are allowed to continue to hold your RRSP even after you leave Canada.

When you are just putting your money into a Canadian bank savings account, the only tax you would pay is on the interest earned from that account.

Hi Afzal, from this website it says "Once withdrawn, the funds can be used for your down payment, closing costs, or even home expenses such as furniture." Source: www.moneywehave.com/what-is-the-first-home-savings-account/

@@BreakingBadDebt Thanks a lot. So do we need to submit a proof of purchase of furniture (after withdrawal) with the stipulated 30 days? Or can we invested in furniture later in time after withdrawal within 30 days of house purchase?

@@afzalashraf30 That would be a good question for your accountant filing the taxes for you that year. I always think you should keep the proof of purchase for your furniture in case you get audited.

Hello, from the CRA website on what constitutes a qualifying withdrawal: "you must have a written agreement to buy or build a qualifying home with the acquisition or construction completion date of the qualifying home before October 1 of the year following the date of the withdrawal" If the home has completed construction before October of the year before you take out the money then you would qualify to withdraw the money.

Hi Leandro, this is what the Government of Canada says about it: "The taxpayer must also have a written agreement to buy or build a qualifying home before October 1 of the year following the year of withdrawal and intend to occupy the qualifying home as their PRINCIPAL place of residence within one year after buying or building it." So when you're filing taxes and not using the home as a principal home, it would disqualify you from using the FHSA. Source: www.canada.ca/en/department-finance/news/2022/08/design-of-the-tax-free-first-home-savings-account.html

Hey Oanh, the FHSA can only be open for15 years OR when the holder turns 71. So if you open the account at age 18, then you have have that account only until 33 years old. Or if you open the account when you're 69, then you can only use that account until you're 71. Similar to a TFSA the capital gains aren't taxed. See 1:04

@@BreakingBadDebt and how about the 15% rule holding tax with the US dividend stock ? Does it apply same rule like the RRSP account too ?

@@oanhpham8780 Hi Oanh, since the FHSA is not a retirement account like the RRSP, there will be the 15% withholding tax applied to US dividend stocks. Source: www.taxtips.ca/fhsa/first-home-savings-account.htm#fhsa-withholding-tax-on-foreign-dividends

Hey! This is what the government site says about this: "a taxpayer must be a first-time home buyer at the time a withdrawal is made. Specifically, the taxpayer could not have owned a home 𝗶𝗻 𝘄𝗵𝗶𝗰𝗵 𝘁𝗵𝗲𝘆 𝗹𝗶𝘃𝗲𝗱 at any time during the part of the calendar year before the withdrawal is made or at any time in the preceding four calendar years. For this purpose, 𝗼𝘄𝗻𝗲𝗿𝘀𝗵𝗶𝗽 𝗶𝘀 𝗱𝗲𝗳𝗶𝗻𝗲𝗱 𝗯𝗿𝗼𝗮𝗱𝗹𝘆 𝗮𝗻𝗱 𝗶𝗻𝗰𝗹𝘂𝗱𝗲𝘀 𝗯𝗲𝗻𝗲𝗳𝗶𝗰𝗶𝗮𝗹 𝗼𝘄𝗻𝗲𝗿𝘀𝗵𝗶𝗽, but excludes a right to acquire less than 10% of a qualifying home." So while you don't live in the home and you meet the first part of the statement, for the 2nd part of the statement, you might be the beneficial owner of the home. I would suggest also speaking to a financial advisor about your specific situation. Here is an article about beneficial ownership: fintrac-canafe.canada.ca/guidance-directives/client-clientele/bor-eng

Yes, if you contributed to the FHSA in April and took the money out to buy a house later on in 2023, you would be able to use the funds towards your first home and deduct your contribution.

I know for the rrsp (hbp) it has to be in the rrsp for 90 days before making the withdraw, is there a limit for how long $ has to be In The FHSA for thanks

Hi Michael! Yes, that's right - if your FHSA investment grew, then you can potentially have more than the $40K max contribution room in that account!

In addition, i think i can actually withdrawl more than 40k portion from fhsa, in the case where i make gains on investments. All of that tax free. 40k is only the lifetime contribution limit for a fhsa

The portion you repay is the 35K because that’s coming from the RRSP HBP. You don’t need to repay the FHSA component, including if you made any gains.

Hi Zakiya, I haven't read anything about buying with a friend, but as long as you both meet the qualifying criteria, I don't see how that's different from buying with a spouse or a common-law partner. I would definitely speak with a real estate lawyer when buying a home with a friend to draft out an agreement as conflicts can arise when sharing living spaces.

Each FHSA is attached to 1 person, so if your fiance is a homeowner already, they wouldn't qualify for the FHSA but you would be able to contribute your portion to the marital home. If you don't end up using the FHSA to buy a home you would roll over your money from your FHSA to your RRSP within 15 years. BUT this is the part where there's not much info because if you bought a home, just not using FHSA funds - are you still allowed to use the account if you're already a homeowner? So I'm not sure if CRA will put out more info on this or make you transfer FHSA funds to RRSP the moment you become a homeowner. Source: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/transferring-funds-between-fhsas-other-registered-plans.html

@@BreakingBadDebt thank you. So I am still eligible for the FHSA if we buy a house together even tho he is not? As an aside, If we buy a house together, will i still be able to take advantage of the first time home owner benefits (land transfer taxes etc) if my spouse is not a first time home buyer but I am? Yes at this point I can see myself using the FHSA as an extended and early rrsp rather than for my first house. I don't see anything against it in the rules but probably not encouraged

@@vkwt Hey so I looked into it some more because I wasn't sure if you were living in the same home or separate homes before getting married, as some couples may not live together before marriage. If you lived in his home in the current year or preceeding 4 years you would not count as a first time home buyer. Source: www.sunlife.ca/en/investments/fhsa/ For the First Time Homebuyers Tax Credit it's the same idea as well "You did not live in another home that you (or your spouse or common-law partner) owned in the year of acquisition or in any of the four preceding years (first-time home buyer)" Source: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html

@@BreakingBadDebt hi Steph, I do not live in his home and have never had my own home. When we buy a house together, will I still qualify for the FHSA and first time homeowners benefit if he has owned a home before the one we buy together?

If you saved money inside the FHSA and then took it all out to buy a house then by Dec 31 of the following year your account will cease to be a FHSA.

Thanks Ali for the kind messages!

Hey Sussan, since this is a pretty new account, what I answer below is based on sources I find on the government and banks websites (so not financial advice): 1) In the following year (Dec 31) after you make your first withdrawal the account will be closed. There was an example given on the government's website that I'll link here: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/opening-closing-and-fhsa.html 2) If you don't withdraw the money left over, then after Dec 31 of the year following the year you made the purchase, it will count as taxable income. 3) To my knowledge, I didn't read anything about a restriction to how many times you can make a withdraw as long as they're going to the same qualify property. 4) If you transfer money from the FHSA, you can only transfer to the RRSP without it counting as taxable income. According to the government: "In order to make a direct transfer, you must not withdraw the property yourself and contribute it to another one of your plans or accounts. Those transactions would not be considered a direct transfer and would cause unintended tax consequences." Source: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/transferring-funds-between-fhsas-other-registered-plans.html

I am 22 and I should have $40k in room right?

Hey you have a lifetime limit of $40K but you can put in a limit of $8K each year. So lets say you open the FHSA this Apr 2023, you can't just put in $40k, only $8K. See 1:47 of the video for reference.

Hi Ryan, the current age limit is between 18 and 71 years old. No mention in the budget of the 40 year old age limit. For the buying from a relative, you have to have “a written agreement to buy or build a qualifying home”. Source: www.budget.canada.ca/2022/report-rapport/tm-mf-en.html#a2_1

I mean if he or she own home at present.

Thanks for the additional info!

Hey Daniel, do you have the link to this update? The Nov 2022 reading of the legislation permits you to use both. Source: www.advisor.ca/tax/tax-news/first-time-homebuyers-can-use-fhsa-and-hbp-feds-propose/

It's been changed.