Canadians can save for a home tax-free using the First Home Savings Account (FHSA). Prospective first-time home buyers can contribute or transfer from their RRSP up to $40,000 towards buying or building their first home.
Like an RRSP, contributions made to an FHSA are generally tax-deductible. Up to $8,000 in FHSA contributions made by December 31, 2023, can be claimed as a deduction on the 2023 income tax and benefit return. Qualifying withdrawals, including investment income on contributions and transfers, are non-taxable when withdrawn to build or buy a qualifying home.
As of December 5, 2023, more than 300,000 Canadians have opened an FHSA to save for a down payment on their first home.