First Home Savings Account (FHSA) Eligibility
There are First Home Savings Account (FHSA) Eligibility requirements that you need to meet to be able to open and use a FHSA.
We will discuss the Requirements, and answer some of the eligibility requirements Frequently Asked Questions related to dual citizenship, permanent residency, joint accounts, and age issues.
First Home Savings Account (FHSA) Eligibility Requirements
To open a FHSA you must be a qualifying individual. A qualifying individual must:
- Be a Canadian Resident.
- Be at least 18 years of age (Note: may be 19 in some provinces).
- Be not more than 71 years of age on December 31 of the year.
- Be a First-Time Home Buyer, i.e. Have not lived in a house that you or your spouse owned in the current year or the last 4 calendar years.
- Not be intending to buy an investment property with the money from the FHSA.
FAQs
These are the FAQs about FHSA Eligibility.
What is a 'First-Time Home Buyer' for Opening a FHSA?
A First-Time Home Buyer for Opening a FHSA is a person who did not, at any time in the current calendar year before the account is opened OR at any time in the preceding four calendar years, live in a Qualifying Home (or what would be a Qualifying Home if located in Canada) as your principal place of residence that either:
- you owned or jointly owned, OR
- your spouse or common-law partner (at the time the account is opened) owned or jointly owned
What is a FHSA Qualifying Home?
A FHSA Qualifying Home is a housing unit located in Canada that is an existing home or being built.
It must be one of the following:
It must NOT be:
Can I open a FHSA if I am a Dual Citizen?
Yes, if you are a resident of Canada and meet the other Eligibility Requirements.
Can I open a FHSA if I am a US Citizen?
Yes, if you are a resident of Canada and meet the other Eligibility Requirements.
Can I open a joint FHSA with my Spouse?
No, the FHSA is an individual account. Both you and your spouse can each open a FHSA which could mean more money for a down payment.
What happens if I stop being a Canadian Resident while I have an open FHSA?
You can participate in an already open FHSA, but you cannot make a Qualifying Withdrawal to build or buy a Qualifying Home while you are a non-resident.
The general rule is that you must be a resident of Canada throughout the period of the date of your first qualifying withdrawal through to the date of acquisition of the Qualifying Home.
If you are a non-resident of Canada and have to make a withdrawal, you will probably be subject to a 25% withholding tax.
What happens if I open a FHSA when I am 71 years of age?
You will only be able to contribute for the year that you are 71, i.e. $8,000. The FHSA must be used or closed before you become 72 or you will have tax issues.
So, if you are over the age of 66 when you start a FHSA you won't be able to put in the lifetime maximum amount ($40,000) into the FHSA.
Disclaimer
Disclaimer: The information on this website is for informational purposes only. Please get professional advice before opening any account or making any transactions.