First Home Savings Account

FHSA

The best of both worlds: Tax-deductible contributions like an RRSP, tax-free withdrawals like a TFSA. Designed specifically for first-time home buyers.

$8,000
2025 Annual Limit
$40,000
Lifetime Limit
15 Years
Account Duration

Professional Explanation

The First Home Savings Account (FHSA), introduced in 2023, is a relatively new registered account designed specifically for Canadian first-time home buyers. It combines the best features of RRSPs and TFSAs: contributions are tax-deductible (like an RRSP), and qualified withdrawals for home purchase are tax-free (like a TFSA).

Key Features:

  • Tax-deductible contributions (immediate tax savings like RRSP)
  • Tax-free growth on all earnings
  • Tax-free withdrawals when purchasing first home (unlike RRSP HBP which requires repayment)
  • Carries forward maximum $8,000 in unused annual room

2025 Contribution Details:

$8,000
Annual limit
$40,000
Lifetime limit

• Carryforward: Maximum $8,000 from prior years

• Account duration: 15 years from opening to either purchase a home or transfer remaining funds to RRSP (tax-free if you have room)

Who Can Open:

  • • First-time home buyers (haven't owned principal residence in past 4 calendar years)
  • • Age of majority in your province (18 or 19 depending on province)
  • • Canadian resident with SIN

Tax Advantage:

Unlike the HBP, qualified FHSA withdrawals for home purchase have no withholding tax, making it more efficient than RRSP withdrawals.

Simple Explanation

Easy to Understand

An FHSA is like a special savings account designed just for buying your first house. It's brand new (started in 2023) and it's basically the "best of both worlds" account.

Here's the deal: When you put money in, you get a tax break (like an RRSP). When your money grows, there's no tax on it (like a TFSA). And when you take it out to buy your house, you don't pay any taxes on it either—it's completely tax-free for your home purchase.

You can put in $8,000 per year, up to $40,000 total. And you have 15 years to either buy a home or move any leftover money to your RRSP without paying taxes.

It's basically a shortcut to saving for a house because you get the tax break going in AND coming out.

Best For

  • First-time home buyers
  • Saving for a down payment
  • Maximizing tax benefits
  • Those who haven't owned a home in 4+ years

Key Benefits

  • Tax deduction on contributions
  • Tax-free growth
  • Tax-free home purchase withdrawal
  • No repayment required (unlike HBP)

Ready to Start Your FHSA?

Get expert guidance on maximizing your first home savings with the FHSA. Book a free consultation today.

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