FHSA
The FHSA is the most useful account most first-time buyers in Canada have access to, because it is the rare one that is deductible going in and tax-free coming out.
The catch is the contribution room — it accrues slowly, so opening the account early matters more than funding it immediately.
A First Home Savings Account combines features of an RRSP and a TFSA. Contributions are generally tax-deductible, and a qualifying withdrawal to buy a first home is generally tax-free — including the growth.
Unlike the Home Buyers' Plan, a qualifying FHSA withdrawal does not have to be repaid.
$8,000 per year, to a $40,000 lifetime limit.
Unused room carries forward, but only up to $8,000 at a time — so the most that can be contributed in any single year is $16,000 (the current year plus one year of carry-forward).
Withdrawals do not restore contribution room. Once the $40,000 of lifetime room is used, it is used.
Room begins accruing when you open the account, not when you become eligible — which is why opening one early is worth doing even if you cannot fund it yet.
Figures verified August 2026. Federal program rules can change; confirm current limits before relying on them.
The FHSA and the Home Buyers' Plan can generally both be used for the same qualifying purchase. They are separate programs with separate rules, and using one does not disqualify you from the other.
For a buyer with both an FHSA and RRSP savings, that combination can be a substantial down payment — with the practical difference that HBP withdrawals must be repaid and FHSA withdrawals need not be.
These are tax questions as much as mortgage questions. For anything turning on your specific circumstances, speak with a qualified tax professional — we are not tax advisors.
Al can look at how your FHSA and other savings fit into a financing plan for the kind of property you're targeting.
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