The Best Tool for First-Time Buyers
The First Home Savings Account (FHSA) combines the best features of RRSPs and TFSAs. If you're saving for your first home, this should be your priority account.
How the FHSA Works
- Annual contribution limit: $8,000
- Lifetime limit: $40,000
- Carry-forward: Unused room carries forward (up to $8,000)
- Tax treatment: Contributions are tax-deductible, withdrawals are tax-free
FHSA vs RRSP vs TFSA
| Feature | FHSA | RRSP (HBP) | TFSA |
|---|---|---|---|
| Tax-deductible contributions | ✅ | ✅ | ❌ |
| Tax-free withdrawals | ✅ | ❌ (must repay) | ✅ |
| Withdrawal limit | $40,000 | $35,000 | No limit |
| Must repay | ❌ | ✅ (15 years) | ❌ |
The FHSA wins on almost every metric.
Maximizing Your FHSA
Strategy 1: Start Early Open your FHSA as soon as you turn 18 (or when you start working). Even if you can't contribute much, you'll start building carry-forward room.
Strategy 2: Invest, Don't Just Save Your FHSA can hold stocks, ETFs, and mutual funds—not just cash. Over 5+ years, investing can significantly boost your down payment.
Strategy 3: Combine with RRSP You can use both the FHSA ($40,000) and RRSP Home Buyers' Plan ($35,000) for a total of $75,000 in tax-advantaged savings.
Eligibility Requirements
To open an FHSA, you must:
- Be a Canadian resident
- Be at least 18 years old
- Be a first-time home buyer (haven't owned a home in the past 4 years)
The 15-Year Rule
You have 15 years from opening your FHSA to use it for a home purchase. After that, you must either:
- Transfer to an RRSP (no tax impact)
- Withdraw and pay tax on the amount
Get Started Today
The sooner you open your FHSA, the more time your money has to grow. Use our down payment calculator to see how the FHSA fits into your savings plan.