FHSA: Canada's First Home Savings Account Explained
A First Home Savings Account (FHSA) is a registered account introduced by the Canadian government in 2023 for first-time home buyers. It is the best of both worlds: contributions are tax-deductible like an RRSP, and qualifying withdrawals to buy a first home are completely tax-free like a TFSA.
2 min read · Updated June 2026
The FHSA is the only registered account that gives you a deduction on the way in AND tax-free growth and withdrawal on the way out — provided the money goes toward a qualifying first home. Every other account makes you choose one or the other. For an eligible first-time buyer, maxing the FHSA before the RRSP or TFSA is almost always the correct order of operations.
Contribution room is $8,000 per year with a $40,000 lifetime maximum. Unlike the TFSA, room only starts accumulating once you open the account — so opening one early, even with a $0 balance, starts the clock. Up to $8,000 of unused room carries forward one year, letting you contribute up to $16,000 in a single year if you skipped the prior year. Over-contributions are penalised at 1% per month.
You must be a Canadian resident, at least 18, and a first-time home buyer — meaning you did not live in a home you owned (or that your spouse/common-law partner owned) at any point in the current year or the prior four calendar years. The account can stay open for 15 years or until the end of the year you turn 71, whichever comes first.
The FHSA stacks with the RRSP Home Buyers' Plan (HBP). A couple buying their first home together can combine two FHSAs ($80,000 of contributions plus growth) with two HBP withdrawals ($60,000 each) — a substantial tax-advantaged down payment. If you never buy a home, the FHSA balance can be rolled tax-free into your RRSP or RRIF without using RRSP room, so the contributions are never wasted.
Like the RRSP and TFSA, the FHSA is a wrapper, not an investment — hold cash, GICs, or low-cost ETFs inside it depending on your time horizon. A buyer 1-2 years out typically holds a HISA or short GIC to protect the down payment; a buyer 5+ years out can hold equity ETFs to grow the balance, since FHSA growth is tax-free when withdrawn for a home.
Richify tracks your FHSA contribution room, lifetime cap, and balance alongside your RRSP HBP capacity — so you can see exactly how large a tax-advantaged down payment you and a partner can assemble before you start house-hunting.
