FHSA: First Home Savings Account
The best of both worlds—tax-deductible like an RRSP, tax-free like a TFSA.
$8,000
Annual Limit
$40,000
Lifetime Limit
15 yrs
Max Account Life
What is an FHSA?
The First Home Savings Account (FHSA) is Canada's newest registered account, launched in 2023. It's designed specifically for first-time homebuyers and combines the best features of RRSPs and TFSAs.
💡 Why It's Amazing
Contributions are tax-deductible (like an RRSP) AND withdrawals for your first home are completely tax-free (like a TFSA). It's the only account that gives you both!
Who Can Open One?
- ✦Canadian resident
- ✦Age 18-71
- ✦First-time homebuyer (haven't owned a home in the past 4 years)
Key Benefits
- ✦Tax deduction: Contributions reduce your taxable income
- ✦Tax-free growth: Investments grow without being taxed
- ✦Tax-free withdrawal: No tax when you buy your first home
- ✦Carry forward: Unused room (up to $8,000) carries to next year
What If You Don't Buy a Home?
If you don't end up buying a home, you can transfer the funds to your RRSP (without affecting your RRSP room) or withdraw it as taxable income. The account must be closed after 15 years or by age 71.
🍁 Canadian Pro Tip
You can use BOTH the FHSA ($40,000) and the Home Buyers' Plan from your RRSP ($60,000) for the same home purchase. That's up to $100,000 in tax-advantaged savings!