The First Home Savings Account (FHSA) is a Canadian registered account introduced in 2023 specifically for first-time home buyers. It combines features of both RRSP and TFSA: contributions are tax-deductible (like RRSP) and qualifying withdrawals are tax-free (like TFSA), with no repayment required.
Limits
Annual contribution limit: $8,000. Lifetime limit: $40,000. Carry-forward: up to $8,000 from one prior year only (does not compound). The account must be closed by December 31 of the year following the first qualifying withdrawal, or 15 years after opening, or the year the holder turns 71, whichever comes first.
Eligibility
FHSA can be opened by Canadian residents 18 (or age of majority) and older but under 71, who are first-time home buyers — meaning they have not occupied a qualifying home owned by themselves or a current spouse in the year of opening or four preceding calendar years.
FHSA vs HBP
FHSA is generally preferred over HBP because there is no repayment requirement. Most first-time buyers maximize FHSA before using HBP.