FIRST HOME SAVINGS ACCOUNT

Bill C-32, which passed as the Fall Economic Statement Implementation Act, 2022, implements measures from the Nov. 3 fall economic statement, the 2022 federal budget and previous budgets.

The Tax-Free First Home Savings Account (FHSA) allows first-time homebuyers to save for a down payment on a tax-free basis.

As with an RRSP, contributions to an FHSA are tax-deductible, and withdrawals to purchase a first home — including from investment income — are non-taxable, as with a TFSA.

There is an annual contribution limit of $8,000 and a lifetime contribution limit of $40,000.

The FHSA has an effective date of April 1, 2023.