FHSA (First Home Savings Account)
Definition
A registered account created in 2023 that combines the advantages of the RRSP and the TFSA for a first home: contributions are tax-deductible, up to $8,000 a year and $40,000 lifetime, and withdrawals for an eligible purchase are not taxed, nor is the accumulated return. Unlike the HBP, nothing has to be repaid. Unused contribution room carries forward, up to an extra $8,000 a year. Example: a couple each contributing $8,000 for three years accumulates $48,000 plus returns, with about $48,000 in tax deductions along the way. For the lender, an FHSA withdrawal is documented like any other down payment: account statement, withdrawal request, deposit. The account must be closed at the latest fifteen years after opening or after the first eligible withdrawal, otherwise the balance can be transferred to an RRSP without penalty.
For your plans
Open the account early to build contribution room, even before funding it, and plan the withdrawal a few weeks before closing. Confirm the current limits with the CRA.