Updated: April 2025  |  bremo.io financial guides

Canada First Home Savings Account (FHSA) 2025

The First Home Savings Account (FHSA) is a registered savings account introduced in April 2023 to help Canadians save for their first home. It combines the best features of both the RRSP and the TFSA: contributions are tax-deductible (like an RRSP), and qualifying withdrawals for a first home purchase are completely tax-free (like a TFSA).

FHSA Key Facts

Who Can Open an FHSA?

To open an FHSA, you must be:

• A Canadian resident
• At least 18 years old (19 in some provinces)
• A first-time home buyer — meaning you have not owned a qualifying home that you lived in as your principal residence at any time during the current year or the preceding four calendar years

Once you purchase your first home and make a qualifying withdrawal, the FHSA must be closed. You can hold the account for a maximum of 15 years after opening.

How FHSA Contributions Work

You can contribute up to $8,000 per year to your FHSA. Contributions are tax-deductible, meaning they reduce your taxable income just like RRSP contributions. If you don't contribute the full $8,000 in a year, you can carry forward up to $8,000 of unused room to the next year — but only one year at a time. The maximum you can contribute in any single year is $16,000 ($8,000 current year + $8,000 carried forward).

The lifetime contribution limit is $40,000. Once you reach $40,000 in total contributions, you can no longer contribute — though your existing balance continues to grow tax-free.

Tax-Free Qualifying Withdrawals

When you purchase your first qualifying home, you can withdraw all your FHSA funds — including all growth — completely tax-free. There is no repayment requirement, which is a major advantage over the RRSP Home Buyers' Plan (which requires repayment over 15 years).

To make a qualifying withdrawal:

• You must be a first-time home buyer at the time of withdrawal
• You must have a written agreement to buy or build a qualifying home
• The home must be your principal residence
• The withdrawal must occur before October 1 of the year after the year you signed the purchase agreement

Using FHSA and HBP Together

You can use both the FHSA and the RRSP Home Buyers' Plan for the same home purchase. This means a first-time buyer could potentially access:

• Up to $40,000 from their FHSA (tax-free, no repayment)
• Up to $35,000 from their RRSP via the HBP (tax-free, repaid over 15 years)
• Total: up to $75,000 per person, or up to $150,000 for a qualifying couple

What If You Never Buy a Home?

If you don't buy a home within 15 years of opening your FHSA, you must close it. You can transfer the funds to your RRSP or RRIF tax-free (without using RRSP contribution room), or withdraw the funds as taxable income. This makes the FHSA a useful savings vehicle even for those who are unsure about buying — you get the RRSP-style deduction and the worst case is the funds roll into your retirement savings.

FHSA Investment Options

Like an RRSP or TFSA, you can hold a wide range of investments inside your FHSA:

• Cash and high-interest savings accounts
• GICs and term deposits
• Stocks (Canadian and foreign)
• ETFs and index funds
• Mutual funds and bonds

Opening an FHSA

Most major Canadian financial institutions now offer FHSAs including the Big 6 banks, credit unions, and online brokerages like Questrade and Wealthsimple. You can open as many FHSAs as you want (at different institutions), but your combined contributions across all accounts cannot exceed the annual and lifetime limits.