The FHSA, explained
The First Home Savings Account (FHSA) launched in 2023 and is arguably the best account a first-time buyer can open: contributions are tax-deductible like an RRSP, and qualifying withdrawals are tax-free like a TFSA. If you're saving for a first home, it usually belongs at the top of the list.
How much you can put in
You can contribute up to $8,000 per year, to a lifetime maximum of $40,000. Unused annual room carries forward (up to $8,000), but only after you've opened an account.
Because contributions are deductible, an $8,000 contribution can cut your taxable income by $8,000 — the refund is effectively a government top-up to your down payment.
Keep reading: FHSA growth calculator · The FHSA vs RRSP vs TFSA. For the official rules, see CRA — First Home Savings Account.
The tax magic: deductible AND tax-free
An RRSP is deductible going in but taxed coming out. A TFSA is the reverse — no deduction, but tax-free out. The FHSA is the rare account that is both deductible on the way in and tax-free on the way out, provided the withdrawal is for a qualifying first-home purchase.
Who qualifies
You must be a Canadian resident, at least 18, and a first-time home buyer — meaning you didn't own a home you lived in during the current year or the previous four calendar years. The account can stay open for up to 15 years.
FHSA vs RRSP Home Buyers' Plan
The RRSP Home Buyers' Plan (HBP) lets you borrow from your RRSP for a first home, but you must repay it. The FHSA never has to be repaid. You can use both together on the same purchase, which many first-time buyers now do.
Frequently asked
What if I never buy a home?
You can transfer the FHSA to your RRSP or RRIF tax-free (it doesn't use RRSP room), so the savings aren't lost — they just become retirement money.
Can I have an FHSA and a TFSA and an RRSP?
Yes. They're separate accounts with separate limits, and using them together is a common strategy.
Sources
General information for Canadian readers, not individualized financial, tax or investment advice. Figures reflect the date reviewed; confirm current limits and rules with the CRA or a qualified professional before acting.