Wealthsimple FHSA

If you're saving for your first home, the FHSA is almost certainly where you should start. It's the only registered account that gives you a tax deduction on the way in and a tax-free withdrawal on the way out.

How the FHSA works

• Contributions are tax-deductible, just like an RRSP, they reduce your taxable income and can generate a refund.
• Growth is tax-sheltered, interest, dividends, and capital gains compound with no annual tax.
• Qualifying withdrawals are tax-free, when you buy your first home, you pay no tax on the money you take out, including all the growth.

That combination is unique. An RRSP gives you the deduction but taxes withdrawals; a TFSA gives tax-free withdrawals but no deduction. The FHSA gives you both, which is why, for eligible first-time buyers, it's usually the very first account to fund.

Contribution limits & carry-forward

You can contribute up to $8,000 per year, to a $40,000 lifetime maximum. The carry-forward rules have a twist worth understanding:

• Carry-forward room only starts accumulating after you open an account, so it pays to open one early, even with a small deposit.
• You can carry forward a maximum of $8,000 of unused room into the next year, letting you contribute up to $16,000 in a single year.
• Unlike the RRSP, contributions made in the first 60 days of a year cannot be applied to the prior tax year, FHSA contributions count for the calendar year they're made.

Opening an FHSA with even $1 today starts your 15-year clock and begins building carry-forward room, a smart, free move if home-ownership is anywhere on your horizon.

Who's eligible?

To open an FHSA you must be:

• A Canadian resident;
• At least 18 (or the age of majority in your province) and under 71;
• A first-time home buyer, meaning you haven't lived in a qualifying home that you (or your spouse/common-law partner) owned during the current calendar year or the previous four calendar years.

Stacking the FHSA with the Home Buyers' Plan

One of the biggest wins is that you can use your FHSA and the RRSP Home Buyers' Plan on the same purchase. Between a maxed-out $40,000 FHSA (plus growth) and up to $60,000 from the HBP, a couple can assemble a six-figure, highly tax-advantaged down payment. Unlike the HBP, FHSA withdrawals for a home never have to be repaid.

What if you don't buy a home?

If your plans change, your FHSA savings aren't lost. You can transfer the full balance, including all growth, into your RRSP or RRIF tax-free and without using any RRSP contribution room. The account can stay open for up to 15 years (or until the end of the year you turn 71, whichever comes first). If you instead withdraw the money as cash for non-home use, it becomes taxable.

How to open a Wealthsimple FHSA

1. Open wealthsimple.com/invite/_Y024Q to attach referral code _Y024Q.
2. Create your account and verify your identity with photo ID and your SIN.
3. Select FHSA as your account type and confirm your first-time-buyer eligibility.
4. Deposit at least $100 from an external bank within 30 days.
5. Your $25 bonus lands in your Cash account within 24 hours of the deposit settling.

Does the $25 bonus use FHSA room?

No. Hold cash, ETFs, or a hands-off managed portfolio inside your FHSA with $0 commissions and no minimum. As with every account, the $25 referral bonus lands in your Cash account, so it never eats into your $8,000 annual or $40,000 lifetime FHSA limits.

FHSA vs TFSA vs RRSP

For a first home, fund the FHSA first to capture both the deduction and the tax-free withdrawal. Use a TFSA for flexible goals where you may need the money back, and an RRSP for broader retirement saving (or to stack via the Home Buyers' Plan). All three qualify for the bonus.

Wealthsimple FHSA questions

Common questions about the FHSA, eligibility, and the $25 bonus.