The FHSA gives you the best of both worlds: RRSP-style tax deductions when you contribute, AND TFSA-style tax-free withdrawals when you buy your first home. No other Canadian account does both.
Opened since April 2023, the FHSA allows first-time buyers to save up to $8,000/year ($40,000 lifetime) in a registered account. Contributions are tax-deductible (like RRSP), investment growth is tax-free, and qualifying withdrawals for a home purchase are completely tax-free (like TFSA).
The numbers for 2026
- Annual contribution limit: $8,000
- Lifetime contribution limit: $40,000
- Unused room carries forward: up to $8,000/year (max $16,000 contribution in a single year with carry-forward)
- Must be used within 15 years of opening (or by December 31 of the year you turn 71)
- Qualifying home: any home in Canada that you intend to live in within 1 year
Why it beats RRSP alone
With RRSP's Home Buyers' Plan (HBP), you can withdraw $60,000 tax-free but you must REPAY it over 15 years. With FHSA, you withdraw tax-free and NEVER repay. The money is gone from the account forever, no strings attached.
Combined power play
You can use BOTH the FHSA ($40K tax-free, no repayment) AND the HBP ($60K tax-free from RRSP, repay over 15 years) for the same home purchase. That is $100,000 in tax-advantaged down payment funding for a couple ($200K if both partners qualify).
If you never buy
If you do not use the FHSA for a home within 15 years, you can transfer the balance to your RRSP (no tax, but counts against RRSP room) or withdraw it (taxed as income). Not ideal, but not a disaster.
