The FHSA is Canada’s most powerful first-time buyer tool. Contributions are tax-deductible AND qualifying withdrawals are completely tax-free.
Contribute up to $8,000/year (max $40,000 lifetime). Unused annual room carries forward up to $8,000.
Contributions reduce your taxable income. Qualifying first-home withdrawals are completely tax-free.
You must not have owned a home in which you lived in the current or any of the preceding four calendar years.
If you don’t buy a home, transfer your FHSA to your RRSP or RRIF without affecting contribution room.
Opening it locks in your contribution room. If you decide not to buy a home, simply transfer to your RRSP. There’s no downside to opening one early.