How much can I contribute to an FHSA?

You can contribute up to $8,000 per year, to a lifetime maximum of $40,000. Up to $8,000 of unused annual room can carry forward to a later year once you have opened an account.

Can I use the FHSA and the Home Buyers' Plan together?

Yes. You can combine a tax-free FHSA withdrawal with an RRSP Home Buyers' Plan withdrawal for the same home purchase, which can give you a substantially larger down payment.

What happens if I never buy a home?

If you do not make a qualifying home purchase, you can transfer your FHSA balance to your RRSP or RRIF without affecting your RRSP contribution room, or withdraw it as taxable income.

Mortgage Glossary

What is First Home Savings Account (FHSA)?

A First Home Savings Account (FHSA) is a registered Canadian account that helps first-time buyers save for a home with tax advantages on both ends. Contributions are tax-deductible like an RRSP, and qualifying withdrawals to buy a first home are tax-free like a TFSA. You can contribute up to $8,000 per year, to a lifetime maximum of $40,000.

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Quick answer

Also known as: FHSA, First Home Savings Account, Tax-Free First Home Savings Account

Key points

Contributions are tax-deductible, up to $8,000 per year and $40,000 over your lifetime.
Qualifying withdrawals to buy a first home are completely tax-free.
You must generally be a Canadian resident, at least 18, and a first-time home buyer.
Investments grow tax-free inside the account.
The FHSA can be combined with the RRSP Home Buyers' Plan for a bigger down payment.
Unused funds can be transferred to an RRSP or RRIF without using RRSP room.

First Home Savings Account (FHSA) explained

The FHSA combines the best features of two existing registered accounts. Like an RRSP, your contributions reduce your taxable income for the year, which can lower the income tax you owe. Like a TFSA, the money grows tax-free inside the account, and when you withdraw it to purchase a qualifying first home, you pay no tax on the withdrawal at all. To open one you generally must be a Canadian resident, at least 18, and a first-time home buyer who has not owned a home you lived in during the current year or the four preceding calendar years.

The annual contribution limit is $8,000, with up to $8,000 of unused room able to carry forward, and the lifetime limit is $40,000. Investments inside the account, such as cash, GICs, or funds, grow without tax. If you do not end up buying a home, you can transfer the balance to your RRSP or RRIF without affecting your RRSP room, or withdraw it as taxable income.

What a First Home Savings Account (FHSA) is for

The FHSA exists to give first-time buyers a dedicated, tax-efficient way to build a down payment. It rewards saving for a home with an upfront tax deduction and tax-free growth, helping buyers accumulate a meaningful down payment faster than they could in a regular savings account.

How it can help you

An FHSA can stretch your savings further because the tax deduction on contributions can generate a refund you reinvest, while tax-free growth compounds over the years you save. A larger down payment lowers your loan-to-value ratio and the mortgage you must carry. When you are ready to buy, Lenderoo shops 40+ lenders for free so you can see how your FHSA-boosted down payment changes the rates and terms you qualify for.

When it comes up

A first-time buyer opens an FHSA and contributes $8,000 a year for several years. Each contribution lowers their taxable income, and the account grows tax-free. When they buy their first home, they withdraw the full balance tax-free and combine it with the Home Buyers' Plan for a larger down payment.

Example: Saving with an FHSA

A buyer contributes the maximum $8,000 to an FHSA in each of five years, reaching the $40,000 lifetime limit. Along the way, investment growth inside the account adds, say, another $5,000 tax-free.

When they purchase a qualifying first home, they withdraw the roughly $45,000 with no tax owing. Because the FHSA can be combined with the RRSP Home Buyers' Plan, they could pair that withdrawal with funds from their RRSP for an even larger down payment, reducing the size of the mortgage they need.

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Questions & answers

First Home Savings Account (FHSA): frequently asked questions

Common questions Canadians ask about first home savings account (fhsa).

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