- Annual limit: $8,000. Unused room carries forward, up to $8,000, so you can contribute as much as $16,000 in a later year.
- Lifetime limit: $40,000.
- What it can hold: the FHSA is a registered account, so you can invest inside it in stocks, bonds, mutual funds, ETFs or GICs, not just cash.
- Who qualifies: Canadian residents aged 18 or older (up to 71) who haven't lived in a home they or their spouse or common-law partner owned in the current year or the previous four calendar years.
- Tax treatment: contributions reduce your taxable income; growth and qualifying withdrawals are tax-free.
- Time limit: the account must be used or closed by the end of the 15th year after you open it, or the year you turn 71.
- If you don't buy: you can transfer the balance to your RRSP tax-free, without using your RRSP contribution room.
The full rules are on the CRA's FHSA page.
Why it matters for high earners. For a buyer in a high tax bracket, the deduction could be worth a lot. Each partner can open their own FHSA, so a couple can shelter up to $80,000 together. There's no downside if plans change, since unused money can roll into an RRSP.
Timing tip. You don't have to claim the deduction in the year you contribute. If you expect a raise, a bonus or a move from residency into practice, you can carry the deduction forward to a higher-income year. Ask your accountant.
Christian's take: I still see the FHSA as an underutilized tool. I see no reason why anyone who qualifies wouldn't open one.
