FHSA | The Mortgage Duo

First Home Savings Account
FHSA

What is the FHSA?

The FHSA is a registered savings account created by the Canadian government to help first-time home buyers save for a down payment.

It combines:

✔️ The tax deduction benefits of an RRSP

✔️ The tax-free withdrawals of a TFSA (when buying your first home)

Contribute $8000 Annually to a max of $40,000 towards your First Home Purchase.

Let’s say someone earns $80,000 per year and contributes $8,000 to their FHSA in one tax year:

This reduces their axable income to $72,000.

Which could save roughly $1,500–$2,000+ in federal and provincial tax combined. (Approximation for general guidance)

You could then take those savings and put it into your First Home Savings Account towards your new home purchase.

Key Benefits of an FHSA

Tax-deductible contributions:
Contributions can be deducted from your taxable income, potentially lowering the amount of tax you pay each year.
Tax-free investment growth:
Any interest, dividends, or investment growth earned inside the account is not taxed.
Tax-free withdrawals for your first home:
When used to purchase a qualifying first home, withdrawals (including growth) are completely tax-free.

Up to $8,000 per year
Up to $40,000 lifetime maximum
Unused annual contribution room can carry forward if you don’t contribute right away

You may be eligible to open an FHSA if you:

** If you haven’t lived in a home you (or your partner) owned in the last four years, you may qualify as a first-time buyer again under FHSA rules.

You can only use FHSA funds once toward a first home purchase
Withdrawn amounts cannot be re-contributed
If you don’t buy a home, funds can later be transferred into an RRSP or RRIF without affecting your RRSP contribution room
The account must be closed by December 31 of the year following your first qualifying withdrawal