FHSA
A Canadian account for saving toward your first home.
What it is
A First Home Savings Account that combines RRSP-style deductions with TFSA-style tax-free withdrawals.
Best for
Eligible Canadians saving for a qualifying first home purchase.
Watch for
Contribution limits, eligibility rules, qualifying withdrawals, and account timelines.
Quick take
- Contributions can reduce taxable income.
- Qualified home withdrawals are tax-free.
- Annual contribution room is limited.
- Unused participation room can carry forward within limits.
Key terms
- Annual limit: maximum you can contribute each year.
- Lifetime limit: total maximum FHSA contributions allowed.
- Qualifying withdrawal: tax-free withdrawal for an eligible home purchase.
- Carry-forward room: unused annual room that may be used later.
Pros
| Topic | Notes |
|---|---|
| Tax deduction | Contributions can lower your taxable income. |
| Tax-free withdrawal | Qualified withdrawals for a first home are not taxed. |
| Investment growth | Money can grow tax-sheltered inside the account. |
| Flexible savings | Can hold cash, GICs, ETFs, mutual funds, stocks, and more. |
Cons
| Topic | Notes |
|---|---|
| Eligibility required | You must meet first-home buyer and residency rules. |
| Contribution limits | You cannot contribute unlimited amounts. |
| Time restrictions | The account cannot stay open forever. |
| Non-qualified withdrawals | Withdrawals not used properly may be taxable. |
Educational content only — not financial advice.