First Home Savings Account (FHSA)

The Best of Both Worlds

Contributions are tax-deductible (like an RRSP), and withdrawals to buy a qualifying first home are completely tax-free (like a TFSA). This makes the FHSA one of the most powerful savings tools ever introduced for first-time buyers.

Key FHSA Rules

• Annual contribution limit: $8,000 per year
• Lifetime contribution limit: $40,000
• Contributions are tax-deductible in the year made
• Unused annual room carries forward by $8,000 (max $16,000 in one year)
• Tax-free withdrawals when buying a first qualifying home
• Can be combined with the Home Buyers' Plan (RRSP withdrawal) for even more buying power
• Account expires after 15 years or at age 71 — unused funds transfer to RRSP or RRIF tax-free
• Must be a first-time home buyer and Canadian resident

How It Compares to the Home Buyers' Plan

The Home Buyers' Plan (HBP) allows you to withdraw up to $35,000 from your RRSP to buy a first home — but it must be repaid over 15 years. The FHSA doesn't need to be repaid. Using both together, a couple could have up to $110,000 tax-free for a down payment.

FHSA and Insurance Products

Segregated funds can be held inside an FHSA, combining the tax advantages of the account with principal protection and guaranteed maturity values — ideal for first-time buyers who can't afford to lose their down payment savings to market volatility.