The Best of Both Worlds: Tax Benefits of the FHSA (Part 3/5)
- Natesh Pillai
- Aug 6
- 1 min read
The First Home Savings Account (FHSA) isn't just a place to stash your cash; it offers powerful tax benefits that make saving for a home even more rewarding. It's often called a "hybrid" account because it combines features of both RRSPs and TFSAs!
Two Major Tax Advantages:
Tax-Deductible Contributions (Like an RRSP!): When you contribute money to your FHSA, the amount you contribute is generally tax-deductible. This means you can subtract that contribution from your taxable income for the year, which can result in a lower tax bill or a larger tax refund!
Tax-Free Growth & Withdrawals (Like a TFSA!): Any investment income you earn inside your FHSA (like interest, dividends, or capital gains) grows tax-free. Even better, when you withdraw money from your FHSA to purchase a qualifying first home, those withdrawals are also tax-free!
These combined benefits make the FHSA a very attractive tool for aspiring homeowners, helping your savings grow faster and allowing you to use every dollar for your down payment without a tax hit.
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