Saving for first home

December 26, 2023



The Tax-Free First Home Savings Account allows Canadians to contribute up to $8,000 per year (up to a lifetime limit of $40,000) for their first down payment. Similar to Registered Retirement Savings Plan (RRSP) contribution, these contributions are also tax deductible on annual income tax returns. And, like a Tax-Free Savings Account (TFSA), withdrawals to purchase a first home—including any investment income on contributions—are non-taxable. Tax-free in; tax-free out.
Earlier in December 2023, the Canadian Federal Government announced more than 300,000 Canadians have opened a Tax-Free First Home Savings Account since April 1, 2023.
“A key focus of our economic plan is making housing more affordable for Canadians. The new Tax-Free First Home Savings Account is an important part of our plan,” said Chrystia Freeland, Deputy Prime Minister and Minister of Housing. “It is also putting home ownership back within reach for more Canadians every single day.”
To maximize 2023 tax return deductions, Tax-Free First Home Savings Account contributions must be made by December 31, 2023. Contributions can also be carried forward to be deducted in future tax years.
To build more homes, faster, Freeland also announced $71 million has been allocated to help build and repair over 1600 co-op homes in Quebec (1004), British Columbia (422), Ontario (132), and New Brunswick (102).