First Home Savings Account (FHSA)
Save for Your First Home with Tax Advantages
2025 Contribution Limit
$8,000
Lifetime Contribution Limit
$40,000
A Smart Way to Save for Your First Home
The First Home Savings Account (FHSA) combines the best features of RRSPs and TFSAs. It offers tax-deductible contributions like an RRSP and tax-free withdrawals like a TFSA when used to purchase your first home. This powerful combination makes it an essential tool for aspiring homeowners.
Key Benefits of an FHSA
Tax-Deductible Contributions
Reduce your taxable income with every contribution, similar to an RRSP.
Tax-Free Withdrawals
Withdraw funds tax-free when used to purchase your first home.
Investment Flexibility
Hold various investments including stocks, bonds, ETFs, mutual funds, and GICs.
RRSP Transfer Option
Transfer unused funds to your RRSP without impacting your RRSP contribution room.
Why an FHSA is Essential for First-Time Homebuyers
Best of Both Worlds
Combine tax-deductible contributions like an RRSP with tax-free withdrawals like a TFSA for maximum tax efficiency.
Flexible Investment Options
Choose from a wide range of investment options to help grow your down payment faster.
RRSP Transfer Flexibility
Transfer unused funds to your RRSP without impacting your RRSP contribution room if you don't buy a home.
Annual Carry Forward
Unused contribution room can be carried forward one year, helping you maximize your savings potential.
No Repayment Required
Unlike the RRSP Home Buyers' Plan, withdrawals for home purchase don't need to be repaid.
Compare Registered Accounts
| Feature | TFSA | RRSP | FHSA |
|---|---|---|---|
| 2025 Contribution Limit | $7,000 | 18% of earned income (max $31,560) | $8,000 |
| Tax on Contributions | After-tax dollars (no deduction) | Tax-deductible | Tax-deductible |
| Tax on Withdrawals | Tax-free | Taxed as income | Tax-free for home purchase |
| Withdrawal Flexibility | Withdraw anytime, no penalties | Penalties unless for HBP or LLP | Must be for first home purchase |
| Contribution Room | Accumulates from Age 18+ or when becoming a Canadian resident | Based on earned income | 1-year carry-forward |
| Age Limits | No age limit | Must convert to RRIF by 71 | Must close after 15 years |
| Recontribution Rules | Next calendar year | Lost unless HBP repayment | No recontribution allowed |
| Best Used For | Flexible savings, investments, emergency fund | Retirement savings | First home purchase savings |
* FHSA = First Home Savings Account, HBP = Home Buyers' Plan, LLP = Lifelong Learning Plan
Optimize Your FHSA
Visualize your FHSA contributions and plan your first home purchase
© 2025 Optiml. All rights reserved.