5 Year Fixed 6.09%

5 Year Variable 6.90%

First Home Savings Account

First Home Savings Account

Date Posted: April 19, 2023

The First Time Home Buyers Savings Account (FHSA) in Canada is a type of account that offers tax benefits and helps first-time homebuyers save money towards their first qualifying home purchase. Contributions made to the FHSA account are tax-deductible, similar to an RRSP, and qualifying withdrawals for purchasing a first home are non-taxable, similar to a TFSA. However, with an FHSA and unlike the Home Buyers’ Plan, the funds do not need to be paid back.



Individuals who are 18 years or older, Canadian residents and first-time homebuyers are eligible to open an FHSA account.



The account can stay open for 15 years, until the end of the year that you turn 71, or at the end of the year following the year in which you make a qualifying withdrawal from an FHSA for the first home purchase, whichever comes first.


Contributions and Deductions

  1. Annual contributions to the account are capped at $8,000, with a maximum lifetime contribution of $40,000.
  2. Unused contribution room can carry forward to the following year up to a maximum of $8,000.
  3. Individuals would be able to claim an income tax deduction for contributions made in a particular taxation year.


If the savings in the account are not used for a qualifying home purchase, they can be transferred to an RRSP or RRIF account on a non-taxable basis. The funds transferred to an RRSP or RRIF will be taxed upon ultimate withdrawal. If not transferred but instead withdrawn, FHSA funds would be subject to taxes.


What is a qualifying withdrawal?

  1. Must be a first-time homebuyer and a resident of Canada at the time of the withdrawal to the acquisition of the qualifying home.
  2. You must have a written agreement to buy or build a qualifying home located in Canada before October 1 of the year following the year of withdrawal.
  3. You must also intend to occupy the qualifying home as your principal place of residence within one year of buying or building it.

How is the FHSA different from the Home Buyer’s Plan?

With the current Home Buyers' Plan, Canadians can withdraw up to $35,000 from their RRSP subject to eligibility and conditions, then pay back the funds to their RRSP over 15 years.


Unlike the Home Buyers’ Plan, with an FHSA, the funds do not need to be paid back.


Our brokers are here to guide you on which investment option, or combination of options, will help you reach your home ownership goals.

If you want to know more about the FHSA - contact a mortgage broker today.