Canada's new Tax-Free First Home Savings Account will be available this week

Canada's new tax-free first home savings account is almost here.

Planning on buying your first home in the coming years? You'll soon be able to open a new tax-free savings account.

One of the proposed measures announced in the 2022 federal budget is set to become a reality this week.

Banks can officially start offering the Tax-Free First Home Savings Account (FHSA) on April 1, according to the 2023 fiscal budget. As part of Ottawa's robust housing plan, it aims to help Canadians save for a down payment to buy their first home.

This is what today’s budget invests in: the possibility for every single Canadian to share in the remarkable opportunities that Canada provides—and in the new era of prosperity that we will build together. https://t.co/HNLLGYVnMs

— Chrystia Freeland (@cafreeland) March 28, 2023

The new registered plan gives prospective first-time homebuyers the ability to save $40,000 on a tax-free basis.

The government compares it to the Registered Retirement Savings Plan (RRSP) in that contributions to the FHSA will be tax-deductible.

And just like a Tax-Free Savings Account (TFSA), withdrawals to purchase a first home—including from investment income—will be non-taxable.

"Tax-free in; tax-free out," reads the budget.

The annual maximum contribution to the account is $8,000 per year. The government is estimating that the FHSA would provide $725 million in support over five years.

Canada's 2023 budget also announced a new one-time grocery rebate, and a new dental care plan for millions of uninsured Canadians.

Many Canadians have been expressing their frustrations with how the federal government has chosen to tackle rising food costs online.