FHSA
First Home Savings Account (FHSA)
Tax-deductible going in. Tax-free coming out. Designed specifically to help Canadians buy their first home.
$8,000
Annual contribution limit
2025
$40,000
Lifetime contribution limit
1 Year
Carry-forward allowed
Tax-Free
Contributions AND withdrawals
The only account that gives you two tax breaks at once
The FHSA is a relatively new account introduced in 2023. It combines the best feature of an RRSP (tax-deductible contributions) with the best feature of a TFSA (tax-free withdrawals). That combination doesn't exist anywhere else in the Canadian tax system.
You contribute up to $8,000 per year (lifetime max $40,000) and deduct every dollar from your taxable income, getting money back from the government today. The funds grow tax-free inside the account. When you're ready to buy your first home, you withdraw tax-free. No repayment required.
If you end up not buying a home, the account doesn't go to waste. You can transfer everything to your RRSP or RRIF without any tax hit and without using up your RRSP contribution room. Either way, you win.
The FHSA advantage: best of both worlds
RRSP
Tax deduction
✓
Free withdrawal
✗
TFSA
Tax deduction
✗
Free withdrawal
✓
FHSA
Tax deduction
✓
Free withdrawal
✓
The FHSA is the only account in Canada that offers both
Why the FHSA is so powerful
A purpose-built account that stacks tax benefits on top of each other.
Tax-Deductible Contributions
Like an RRSP, every dollar you put into an FHSA reduces your taxable income in the year you contribute, giving you a real tax refund.
Tax-Free Withdrawals
Like a TFSA, qualifying withdrawals for a first home purchase are completely tax-free. You get the deduction going in and pay nothing coming out.
Transfer to RRSP if Unused
If you don't end up buying a home, you can transfer your FHSA directly to your RRSP or RRIF, without affecting your existing RRSP contribution room.
Stack With the Home Buyers' Plan
You can use your FHSA and the RRSP Home Buyers' Plan (HBP) at the same time, potentially accessing $40,000 + $35,000 = $75,000 per person toward your first home.
How the FHSA works
Open it. Fill it. Buy your home. Or transfer it, there's no losing scenario.
1
Confirm you qualify as a first-time home buyer
You must be a Canadian resident, 18–71 years old, and neither you nor your spouse can have owned a qualifying home you lived in during the current year or the previous four years.
2
Open an FHSA
Available at most banks and online brokerages. You can open multiple FHSAs, but your total contributions across all accounts cannot exceed your available room.
3
Contribute up to $8,000 per year
If you don't contribute the full $8,000 in a given year, you can carry forward up to $8,000 of unused room to the following year. Note: the carry-forward is limited to one year.
4
Invest and grow tax-free
Your FHSA can hold the same types of investments as an RRSP or TFSA. Growth is completely tax-sheltered as long as the funds stay in the account.
5
Withdraw tax-free to buy your home
When you're ready to buy, make a qualifying withdrawal. No tax. No repayment required. Your contribution room isn't added back after withdrawal.
6
Transfer to RRSP if you don't buy
If you haven't bought a home after 15 years, or by the end of the year you turn 71, transfer the balance tax-free to your RRSP or RRIF. It doesn't reduce your RRSP room.
FHSA rules and limits
Everything you need to know about the account before you open one.
Annual Contribution Limit
$8,000
2025
Lifetime Contribution Limit
$40,000
Carry-Forward Room
Up to $8,000 (one year only)
Tax on Contributions
Fully deductible from taxable income
Tax on Growth
Tax-free inside the account
Tax on Qualifying Withdrawal
None (first home purchase)
Eligible Age
18 to 71 years old
Account Lifespan
15 years from opening, or by end of year you turn 71
If Unused
Transfer to RRSP/RRIF, tax-free, does not reduce RRSP room
Stack With HBP
Yes, combine FHSA + RRSP Home Buyers' Plan
Eligible Investments
Stocks, ETFs, GICs, bonds, mutual funds, cash
Recontribution After Withdrawal
Not allowed
How Optiml uses this
Optiml factors your FHSA into your full plan.
If you have an FHSA, Optiml includes it in your complete financial picture, modeling the contribution strategy, the home purchase withdrawal, or the RRSP transfer path. It coordinates your FHSA with your TFSA, RRSP, and other accounts to optimize your overall tax position.
