FHSA (First Home Savings Account)

The best of both worlds

Canada's two flagship registered accounts each give you one tax break. An RRSP gives you a deduction going in, but withdrawals are taxed. A TFSA gives you nothing going in, but withdrawals are tax-free. The FHSA is the only account that gives you both: contributions reduce your taxable income the way RRSP contributions do, and when you withdraw the money to buy a qualifying first home, you pay no tax at all, on the contributions or on decades of growth.

That combination makes the FHSA the single best place for a first home down payment in Canada. If you are eligible and saving for a home, it should generally be filled before your RRSP or TFSA.

Contribution limits and the carry-forward trap

You can contribute $8,000 per year, up to a lifetime maximum of $40,000 (as of July 2026). Unused room carries forward, but only up to $8,000, meaning one missed year's worth. Skip three years and you can still only catch up $8,000 of it, for a maximum contribution of $16,000 in a single year.

Here is the crucial difference from a TFSA: FHSA contribution room only starts accruing after you open the account. TFSA room piles up automatically from age 18 whether you have an account or not. FHSA room does not. If you think you might ever buy a first home, open an FHSA now, even with $0 in it. Opening the account starts the room clock: a year later you have $16,000 of room instead of $8,000.

Who can open one

You must be a Canadian resident, at least 18 years old (19 in provinces where that is the age of majority), and a first-time homebuyer. For FHSA purposes, that means you did not live in a home that you or your spouse or common-law partner owned at any time this year or in the previous four calendar years (as of July 2026). Notably, past ownership can expire: someone who sold a home six years ago and has been renting since can qualify again.

The 15-year clock and the hidden RRSP bonus

An FHSA cannot stay open forever. It must be closed by the earliest of three dates: 15 years after you opened it, the end of the year you turn 71, or the end of the year following your first qualifying withdrawal.

What if you never buy a home? This is where the FHSA quietly shines. You can transfer the entire balance, contributions and growth, to your RRSP or RRIF tax-free and without using any of your RRSP contribution room. You keep the deductions you already claimed, and the money simply continues growing tax-deferred. In effect, opening an FHSA can hand you up to $40,000 of bonus RRSP room. The worst case for an FHSA is that it becomes extra RRSP savings, which is a very good worst case.

Deduction timing and stacking with the HBP

Like an RRSP deduction, the FHSA deduction is flexible: you can contribute now and defer claiming the deduction to a future year when your income, and therefore your marginal tax rate, is higher. One exception: amounts transferred in from an RRSP do not create a new deduction, since they were already deducted once.

You can also combine the FHSA with the RRSP Home Buyers' Plan (HBP) on the same purchase. The HBP lets you borrow up to $60,000 from your RRSP (as of July 2026), repayable over 15 years. A couple stacking maxed FHSAs and full HBP withdrawals could put well over $200,000 of tax-advantaged money toward a first home.