GroRight
Book a Discovery Call
Book a Discovery Call
Resources · registered accounts

First Home Savings Account (FHSA)

A registered account built specifically for a first home purchase. Combining an RRSP-style contribution deduction with TFSA-style tax-free qualifying withdrawals.

A small house model, representing a home purchase

What it is

The First Home Savings Account (FHSA) is a registered account introduced to help eligible Canadians save for a first home purchase. It combines features of the other two main registered accounts: contributions are generally tax-deductible, similar to an RRSP, and a qualifying withdrawal used toward a first home purchase is completely tax-free, similar to a TFSA. To open one, you generally need to be a Canadian resident, at least 18 (or the age of majority in your province), and a first-time home buyer, meaning you, or your spouse or common-law partner, haven’t owned a home you lived in as a principal residence during the current year or the four preceding calendar years.

Eligibility, contributions & withdrawals

The FHSA allows an $8,000 annual contribution limit, with unused room carried forward up to an additional $8,000 from the prior year, meaning a maximum contribution of $16,000 in a single year if you had unused room. The lifetime contribution limit across all of an individual’s FHSAs is $40,000. Participation generally ends at the earliest of making a qualifying withdrawal, 15 years after opening the account, or the end of the year you turn 71.

Figures current as of October 2026. Confirm current rules at canada.ca before relying on them.

Tax treatment

Contributions are generally tax-deductible, reducing your taxable income similar to an RRSP contribution. A qualifying withdrawal, one used toward buying or building a first home that meets the program’s conditions, is completely tax-free, similar to a TFSA withdrawal. A non-qualifying withdrawal is taxable as income, though funds can generally be transferred to an RRSP or RRIF without immediate tax instead of withdrawing them directly.

Benefits, risks, and common misunderstandings

Benefit

Combines a tax deduction on contributions with a tax-free qualifying withdrawal, a combination no other registered account offers.

Risk or restriction

The tax-free treatment only applies to a qualifying withdrawal for an eligible first home purchase; using the funds for anything else is treated as a taxable withdrawal.

Benefit

Can be used alongside the RRSP Home Buyers’ Plan for the same home purchase, potentially increasing total funds available.

Risk or restriction

Coordinating both programs for the same purchase has specific rules and interactions that are easy to get wrong without reviewing the current program details.

Benefit

Unused contribution room carries forward, giving some flexibility in timing contributions.

Risk or restriction

The carry-forward only ever adds one additional year’s room, up to $8,000. It does not compound indefinitely the way TFSA room does.

Benefit

A common misunderstanding corrected: not everyone can open an FHSA.

Risk or restriction

Eligibility specifically requires first-time home buyer status, assessed against your, and your spouse’s, home ownership history over roughly the preceding four years, not just whether you currently own a home.

FHSA vs. the RRSP Home Buyers’ Plan

Unlike the RRSP Home Buyers’ Plan, FHSA contributions don’t need to be repaid. Unlike a TFSA, FHSA contributions are deductible. But FHSA funds are restricted to a qualifying home purchase for the tax-free treatment to apply. See our RRSP page for more on the Home Buyers’ Plan.

For business owners

FHSA contribution room depends on having a valid Social Insurance Number and meeting residency, age, and first-time buyer conditions. It is not connected to employment or dividend income the way RRSP room is. An incorporated business owner who draws dividends can still open and contribute to an FHSA on the same terms as any other eligible individual, which can make it a useful personal planning tool even where RRSP room is limited.

Frequently asked questions

Can I use an FHSA and the RRSP Home Buyers’ Plan for the same home?
Generally yes, both can be used toward the same qualifying first home purchase, subject to each program’s specific conditions. Review current program rules, since the interaction between the two has specific requirements.
What if I don’t end up buying a home?
Funds can generally be transferred to an RRSP or RRIF without using up RRSP contribution room, or withdrawn, taxably, if the account isn’t used for a qualifying purchase within the eligible period.
Can my spouse and I each have one?
Yes, each eligible individual can open their own FHSA, which can effectively double a household’s combined contribution room for a shared home purchase.
Does buying a home outside Canada qualify?
No. The qualifying home must be located in Canada.
Is there a minimum age?
You generally need to be at least 18, or the age of majority in your province or territory, whichever applies, and no older than 71 in the year you open the account.

Keep learning

Planning a home purchase alongside other financial decisions for your business? Book a strategy consultation →