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First Home Savings Account

This is a new registered plan helping Canadians save towards their first home. Account holders can contribute a maximum of $8,000 annually, to a total of $40,000 over the lifetime of the plan. An FHSA combines some of the features of a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). Like an RRSP, contributions will generally* be tax-deductible. Like TFSA withdrawals, when a qualifying withdrawal is made to purchase a qualifying home, the amount withdrawn, including any income or gain, is non-taxable


Who is eligible to open an FHSA?
  • Someone who is at least 18 years of age, but no more than 71 years of age on December 31 of the year
  • A resident of Canada
  • A first time home buyer
 

Contributions

Annual Contribution Limit

There is an annual limit of $8,000. This participation room includes any contributions made or any transfers from your RRSP.

Lifetime Contribution Limit

The lifetime contribution limit is $40,000. All contributions made and any transfers from your RRSP to your FHSA will reduce your remaining lifetime FHSA limit.
 

Contribution Timeline

Unlike an RRSP, all contributions to an FHSA must be made by December 31st. Unlike a TFSA and RRSP, you start to earn contribution room only after opening the account.


Carry Forward Room
You can carry forward unused FHSA participation room at the end of the year, up to a maximum of $8,000 to use in the following year. Any FHSA carryforward will be included in the calculation of your FHSA participation room for the year. 

Unused FHSA Funds
You must use your FHSA contributions within 15 years of opening the account, or  by the time you turn 71 years old, whichever is sooner. After that time, you can transfer these savings into an RRSP, RRIF or make a taxable withdrawal.


Withdrawals

Funds from your FHSA can be withdrawn as a single lump sum, or as a series of smaller withdrawals. You can even make withdrawals within 30 days of moving into your new home. Just be sure you understand the difference between qualified and unqualified withdrawals outlined below.

Qualified Withdrawals
For withdrawals from an FHSA to be non-taxable, they must meet the following conditions:
  • You must be a first-time homebuyer when you withdraw the money.
  • You must be buying or building a home in Canada.
  • You must have a written agreement to either buy or build a qualifying home before October 1 of the year after you made the withdrawal.
  • You must intend to make the home your primary residence within one year of building or buying it.
  • FHSAs must be closed before the end of the year after you make your first withdrawal. Any funds left in your FHSA at that time must be transferred to an RRSP or RRIF or withdrawn. Transfers to an RRSP or RRIF are non-taxable and any funds withdrawn will be taxed at your marginal tax rate.

Non-Qualifying Withdrawals
Non-qualifying withdrawals don’t count toward the lifetime or annual contribution limit of your FHSA.
  • Includes any money withdrawn for reasons other than buying your first home.
  • Will be included in your income and taxed at your marginal rate.
  • Will be subject to withholding taxes by your financial institution, similarly to taxable RRSP withdrawals.


*To learn more about the First Home Savings Account, visit the CRA website.

OCCU's FHSA Mortgage Benefits 

Mortgage Rate Discount Credits
Member's who hold a First Home Savings Account with OCCU, who then obtain a mortgage with us are entitled to receive Mortgage Rate Discount Credits. Every dollar contributed to your FHSA will determine your eligible credit.

For example, currently on a $600,000 mortgage, you would save approximately $4,100 during your first term if you contributed the full $40,000 lifetime limit in your FHSA.

The example provided is the savings over a five year term, as these credits are only available on a 5 year fixed rate mortage. 

Mortgage Rewards
Refer a new person to OCCU for an FHSA! If they, in turn, also get their mortgage with OCCU, you would both qualify for our Mortgage Rewards program. 

For example, a $600,000 mortgage would pay a combined referral of $3,000. $1,800 to you, the referrer, and $1,200 to the person you referred (Illustrative purposes only, conditions apply)
 

FHSA

  • Members are eligible to contribute $8,000 per year to their FHSA.
  • Lifetime contribution limit of $40,000.
  • Members are responsible for ensuring they are not exceeding their allowable contribution limits.
  • Members can carry forward unused FHSA participation room at the end of the year up to a maximum of $8,000 to use in the following year. Any FHSA carryforward will be included in the calculation of your FHSA participation room for the year.
  • All required documentation must be signed by members to complete their FHSA account opening.
  • Members must be qualifying individuals according to CRA’s guidelines to open an FHSA.
  • Qualifying withdrawals from a member’s FHSA are solely to be used for a qualifying first home purchase, according to CRA’s guidelines.
  • Non-Qualifying withdrawals will be taxed accordingly as per CRA’s guidelines.
  • FHSA participation periods begins upon account opening and ends on December 31st of the year in which is the earliest of either the 15th anniversary of the opening of your first FHSA, you turn 71 years of age, or the year following your first qualifying withdrawal from your FHSA.
  • Members are not permitted to participate directly in their spouse or common law partner’s FHSA. Your spouse or common law partner is the only person who can participate in their FHSA.
  • Only the holder of an FHSA can claim the FHSA contributions as a tax deduction on their income tax and benefit return.
  • Unlike RRSPs, contributions made to your FHSA during the first 60 days of the year are not deductible on your previous year’s income tax and benefit return.
  • Members cannot claim a tax deduction for any FHSA contributions that are made after the first qualifying withdrawal.

Mortgage Rate Discount Credits

  • OCCU FHSA holders are entitled to participate in the Mortgage Rate Discount Credits program.
  • Mortgage Rate Discount Credits are earned monthly and calculated daily, at a rate of 0.000001% for each $1 on deposit in your FHSA per year.
  • The maximum Mortgage Rate Discount Credits one can earn is 1.44%
    • Year 1 $8,000 x 12 months = 0.096%
    • Year 2 $16,000 x 12 months = 0.192%
    • Year 3 $24,000 x 12 months = 0.288%
    • Year 4 $32,000 x 12 months = 0.394%
    • Year 5 $40,000 x 12 months = 0.480%
    • Total Mortgage Rate Discount Credits earned over the period = 1.44%
  • Mortgage Rate Discount Credits hold no redemption value.
  • Mortgage Rate Discount Credits are non-transferable.
  • If an OCCU FHSA holder(s) obtain(s) their mortgage with OCCU, Mortgage Rate Discount Credits may be applied against their new mortgage rate.
  • Mortgage Rate Discount Credits may only be applied against a mortgage rate where the mortgage is to purchase a "Qualifying property" as defined by the FHSA guidelines.
  • Joint mortgage applicants may combine individually earned Mortgage Rate Discount Credits but only to the individual maximum Mortgage Rate Discount Credit ceiling of 1.44%.
  • Where only one joint mortgage applicant has an OCCU FHSA, the resulting mortgage rate discount will be prorated based on the number of applicants if all applicants do not have an OCCU FHSA.
  • The FHSA(s) must be liquidated and form part of the purchase of the property for which the mortgage is being issued for to be able to apply your Mortgage Rate Discount Credits
  • Mortgage Rate Discount Credits may only be applied against an OCCU posted five-year fixed rate mortgage.
  • Mortgage Rate Discount Credits are only applied against the first five-year term of the mortgage, no benefit is carried forward for future terms.
  • The maximum mortgage rate discount is a reduction of 10% of the posted five-year fixed rate mortgage.
  • Only mortgages compliant to Oshawa Community Credit Union Mortgages policies qualify for Mortgage Rate Discount Credits.

 

*Terms, Conditions and Rates are subject to change.

 

 

Your deposits are protected.

At Oshawa Community Credit Union, eligible deposits in registered accounts have unlimited coverage through the Financial Services Regulatory Authority (FSRA).
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