FHSA
The ultimate down payment accelerator. Tax-deductible in, tax-free out.
Key Benefits
Dual Tax Advantage: Tax deduction on contributions AND tax-free withdrawal.
$8,000 Annual Limit: Up to $40,000 lifetime contribution room.
15-Year Horizon: Funds can grow tax-free for up to 15 years.
RRSP Rollover: Unused funds can roll into an RRSP without using contribution room.
"The FHSA combines the best traits of the RRSP and TFSA specifically for buying a home. If you are a prospective first-time buyer, this should be your primary funding vehicle. We help you maximize this account to reach your down payment goal faster."
FHSA: Frequently Asked Questions
The FHSA allows up to $8,000 in contributions per year, to a lifetime maximum of $40,000. Unused annual room carries forward by up to $8,000, so opening the account early preserves flexibility even if you are not ready to contribute right away.
The Home Buyers' Plan lets you withdraw up to $35,000 from an existing RRSP, but that amount must be repaid over 15 years or it becomes taxable income. FHSA contributions are tax-deductible like an RRSP, but qualifying withdrawals for a first home are completely tax-free and never need to be repaid. Many buyers use both together for a larger, more tax-efficient down payment.
If the funds are not used for a qualifying first home purchase within 15 years of opening the account or by age 71, the balance can be transferred to an RRSP or RRIF without using any RRSP contribution room, or withdrawn as taxable income. Either way, the original tax deduction is not lost.
You qualify if you have not owned a home that you lived in as your principal residence at any time during the current calendar year or the preceding four calendar years, even if you owned property before that window. Many Canadians who owned a home years ago still qualify.
Related reading & resources
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