The First Home Savings Account combines the best features of the RRSP and the TFSA into a single tool for first-time buyers: contributions are tax-deductible, and withdrawals to buy a first home are tax-free. For anyone planning to buy, it's the first account to open and fund — and many people still don't know it exists.
How the mechanics work
You can contribute up to $8,000 per year, to a lifetime maximum of $40,000, with contribution room carrying forward. Contributions reduce your taxable income like an RRSP; qualifying withdrawals for a first home are tax-free like a TFSA. You can hold it for up to 15 years, and you can transfer unused balances to an RRSP or RRIF without penalty if your plans change.
How it stacks against the Home Buyers' Plan
The Home Buyers' Plan lets you borrow from your RRSP but requires repayment; the FHSA gives you the deduction without the repayment obligation. For most first-time buyers, funding the FHSA first is the stronger move — and the two can be combined to stack a larger down payment. The order and the amounts should follow a plan, not a guess.
Open it early, fund it steadily
Because the annual limit is capped, the sooner you open an FHSA the more lifetime room you accumulate. Even modest monthly contributions build a meaningful down payment over a few years, with a tax refund to reinvest. We help first-time buyers sequence the FHSA, TFSA, and RRSP into a single down-payment strategy that captures every advantage available.
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