Canada's best-kept secret for first-home buyers. See how fast you can max it out.
The FHSA is a registered account introduced in 2023 that combines RRSP-like tax deductions with TFSA-like tax-free withdrawals — specifically for buying your first home. You get a tax deduction when you contribute, your investments grow tax-free, and withdrawals for a home purchase are tax-free.
You can contribute up to $8,000 per year with a lifetime maximum of $40,000. Unused room carries forward (up to $8,000 — so max $16,000 in a catch-up year). You have 15 years from opening to use the account.
You must be a Canadian resident aged 18-71, and you must not have owned a home in the current year or the previous 4 calendar years. You also can't have lived in a home owned by your spouse/partner during that period.
Yes! You can use both the FHSA (up to $40,000) and the HBP ($60,000 from your RRSP) for the same home purchase — that's up to $100,000 in tax-advantaged savings. The HBP must be repaid over 15 years; FHSA withdrawals never need to be repaid.
If you don't use the FHSA within 15 years (or by age 71), you can transfer the balance to your RRSP/RRIF tax-free (doesn't use RRSP room) or withdraw it as taxable income. The tax deductions aren't clawed back if you transfer to RRSP.
Like an RRSP, contributions are tax-deductible. At a 30% marginal rate, an $8,000 contribution gives you a $2,400 tax refund. If you reinvest the refund, your effective cost of saving is much lower.