Launched in April 2023, the First Home Savings Account (FHSA) is Canada’s newest registered savings vehicle specifically designed for first-time home buyers. It combines the best features of both the RRSP and the TFSA — and if you’re planning to buy in the next 5–15 years, you should open one immediately.
How the FHSA Works
You can contribute up to $8,000 per year (maximum $40,000 lifetime). Contributions are tax-deductible (like an RRSP), and withdrawals for a qualifying home purchase are completely tax-free (like a TFSA). This is genuinely exceptional — you get the deduction going in AND don’t pay tax coming out.
FHSA + HBP: Stacking the Programs
You can use both the FHSA and the Home Buyers’ Plan (which lets you withdraw up to $35,000 from your RRSP tax-free) in the same purchase. Combined, that’s up to $75,000 in registered savings you can put toward a first home — per person. A couple could theoretically stack $150,000.
Investment Options
Like a TFSA or RRSP, you can hold a wide range of investments inside your FHSA — GICs, ETFs, mutual funds, and stocks. Given the tax treatment, most advisors recommend maximizing growth within the account using broad market ETFs if your timeline is 5+ years.
When to Open One
Today. Even if you’re not buying for several years, unused contribution room carries forward (up to $16,000 in the second year), and the tax deductions begin as soon as you start contributing. Every year you wait is money left on the table.