The First Home Savings Account is one of the most useful tools a first-time buyer has — tax-deductible in, tax-free out, when the money goes toward a qualifying first home. Here's how it actually works.
The FHSA (First Home Savings Account) is a registered account that combines the best feature of an RRSP (contributions are tax-deductible) with the best feature of a TFSA (withdrawals are tax-free) — as long as the money is used toward a qualifying first home purchase.
You can contribute up to $8,000 per year, up to a $40,000 lifetime limit, and unused contribution room from prior years (up to $8,000) carries forward once the account is opened. Every dollar you contribute reduces your taxable income for the year, just like an RRSP contribution — and when you eventually withdraw the funds for a qualifying home purchase, none of it is taxed.
It also pairs with the RRSP Home Buyers' Plan. The two programs aren't either/or — a first-time buyer can use FHSA savings and an RRSP withdrawal under the Home Buyers' Plan toward the same purchase, which meaningfully increases how much you can put down without touching non-registered savings.
You must be a Canadian resident, at least 18 years old, and a first-time home buyer — generally meaning you (or your spouse/common-law partner) haven't owned a home you lived in during the current year or the preceding four calendar years.
This page is general information, not tax or financial advice. FHSA rules, limits and eligibility can change — always confirm your specific situation with an accountant or financial advisor before you contribute or withdraw.
Amir works alongside a network of mortgage specialists who can walk through how your FHSA and down payment fit into your overall pre-approval and purchase timeline.