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Ottawa, Ontario

Canadians work hard to one day achieve their dream of homeownership, and we are helping them get there sooner. However, the high cost of downpayments coupled with the limited supply of new housing are a barrier to homeownership for many Canadians, especially younger generations. 

Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced that now nearly 1 million Canadians have opened a Tax-Free First Home Savings Account to save for their first downpayment.

The Tax-Free First Home Savings Account is a key tool to make homeownership more affordable by allowing Canadians to contribute up to $8,000 per year, and up to a lifetime limit of $40,000, for their first down payment. 

The Tax-Free First Home Savings Account is a powerful financial tool that supports generational fairness by putting the homeownership opportunities that have been available to generations of Canadians back within reach of young Canadians today.

To maximize 2024 tax return deductions, Tax-Free First Home Savings Account contributions must be made by December 31, 2024. Contributions can also be carried forward to be deducted in future tax years.

Today’s milestone is just one part of the federal government’s housing plan—the most ambitious in Canadian history—to build 4 million new homes and unlock the dream homeownership for every generation. It builds on the significant reforms to mortgages announced in recent months, such as allowing 30-year amortizations for first-time home buyers and buyers of new builds, and increasing the insured mortgage cap to $1.5 million. This will lower downpayments and monthly costs for homeowners. 

Quotes

“Our government’s housing plan is the most ambitious housing plan in Canada’s history—it is a plan to build 4 million new homes. Today, nearly 1 million Canadians—or about 1 in 40 Canadians—are one step closer to having the downpayment needed to buy that first home, with the help of our Tax Free First Home Savings Account. We’re doing everything we can to put homeownership back within reach for every generation of Canadians.”

The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

Quick facts

  • In Budget 2024 and Solving the Housing Crisis: Canada’s Housing Plan, the federal government announced an ambitious whole-of-government approach to addressing the housing crisis by building more homes, making it easier to rent or own a home, and helping Canadians who cannot afford a home. 
  • A key part of the government’s plan to put housing back within reach is the Tax-Free First Home Savings Account. The Canada Revenue Agency provides on-line Tax-Free First Home Savings Account Estimators to help you understand how a tax-free first home savings account (FHSA) can help you save for your first home. To maximize 2024 tax return deductions, Tax-Free First Home Savings Account contributions must be made by December 31, 2024. Contributions can also be carried forward to be deducted in future tax years.
  • Here’s an example of how it can help Canadians save for their first down payment:
    • Olivia and Amira are looking for a first home in Ontario. They each save the maximum $8,000 per year in their Tax-Free First Home Savings Account, which they can deduct from their income at tax time. They both make between $70,000 and $100,000, which means for every $100 contributed to their Tax-Free First Home Savings Account, they receive $20.50 in federal tax savings—delivering an annual federal tax refund of $1,640.
    • After five years of saving, Olivia and Amira have a combined $90,000 (including $10,000 in investment returns) that they can withdraw, tax-free, for a down payment on their first home. Over five years, they will have benefitted from a combined $18,450 in federal tax relief, in addition to nearly $8,000 in provincial tax relief.
    • They use their Tax-Free First Home Savings Account as a 15 per cent down payment to qualify for a mortgage and purchase their first home for $600,000.
    • When Olivia and Amira file their taxes after buying their first home, they will receive an additional $1,500 in federal tax relief through the First-Time Home Buyers’ Tax Credit.

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