The First Home Savings Account (FHSA) is a registered account that lets first-time buyers save up to $8,000 a year, to a $40,000 lifetime limit, for their first home. According to the Canada Revenue Agency (CRA), contributions are tax-deductible like a Registered Retirement Savings Plan (RRSP), and a qualifying withdrawal to buy a home is tax-free like a TFSA, with nothing to pay back.
| Annual limit | $8,000 |
| Lifetime limit | $40,000 |
| Unused room you can carry forward | Up to $8,000 |
| Contributions | Tax-deductible |
| Withdrawals for a first home | Tax-free, no repayment |
| How long you have | 15 years from opening, or until the end of the year you turn 71 |
| If you never buy | Can be moved to your RRSP |
Who can open an FHSA
According to the CRA, you can open an FHSA if you're a resident of Canada, at least 18, and no older than 71 at the end of the year. You also have to be a first-time buyer: at no point in the current year, or the four calendar years before it, can you have lived in a home that you or your spouse or common-law partner owned.
The spouse rule catches people. If you live in a home your partner owns, you can't open an FHSA, even if your name isn't on the title. Someone who sold their last home and has rented for four full calendar years usually qualifies again.
How contribution room works
FHSA contribution room only starts building once you open your first FHSA. You get $8,000 of room that year, and $8,000 more each year after, to the $40,000 lifetime limit.
If you don't use a year's room, you can carry forward up to $8,000 of it, so the most you can ever put in one year is $16,000. For example, open an account in 2025 with $0 in it, and in 2026 you can contribute $16,000. Contribute $8,000 a year from 2026 and you'll hit $40,000 in 2030.
Open one as early as you can, even with a small deposit. Every year you wait is a year of room you can't get back, beyond the one-year carry forward.
What you can hold inside it
An FHSA can hold the same kinds of investments as a TFSA or RRSP: savings, GICs, stocks, bonds, ETFs and mutual funds. Growth inside the account is tax-free when it's withdrawn for a qualifying home, so the money can come out as more than $40,000.
How you invest it depends on when you plan to buy. Money you'll need next year usually sits somewhere stable; money you won't touch for years can take more risk. That's a question for your bank or advisor, not a rule.
How far an FHSA goes in Waterloo Region
The table below shows whether a full FHSA covers the minimum down payment on the typical home in each Waterloo Region city, using the median price of recent sales.
| City | Detached | Freehold townhouse | Condo apartment |
|---|---|---|---|
| Kitchener | Two FHSAs cover it $47,200 minimum on a $722,000 median | One FHSA covers it $37,800 minimum on a $628,000 median | One FHSA covers it $16,800 minimum on a $336,000 median |
| Waterloo | Two FHSAs cover it $60,000 minimum on a $849,450 median | Two FHSAs cover it $41,500 minimum on a $665,000 median | One FHSA covers it $20,000 minimum on a $400,000 median |
| Cambridge | Two FHSAs cover it $46,500 minimum on a $715,000 median | One FHSA covers it $36,500 minimum on a $615,000 median | One FHSA covers it $18,500 minimum on a $370,000 median |
| Woolwich | Two FHSAs cover it $63,000 minimum on a $880,000 median | One FHSA covers it $37,100 minimum on a $621,000 median | Too few sales |
| Wilmot | Two FHSAs cover it $62,000 minimum on a $870,000 median | Too few sales | Too few sales |
| Wellesley | Two FHSAs cover it $67,500 minimum on a $925,000 median | Too few sales | Too few sales |
| North Dumfries | Two FHSAs cover it $59,500 minimum on a $845,000 median | Too few sales | Too few sales |
Minimum down payment on the median sold price, against a full FHSA ($40,000) or a couple's two ($80,000), before any growth. Medians cover the 90 days of sales ending October 26, 2026; fewer than 10 sales and we don't show a figure. How we calculate this.
The minimum is only the floor. Closing costs come on top, about 1.5% of the price, and every step up in down payment lowers your mortgage insurance premium. That's why many buyers pair the FHSA with savings or the Home Buyers' Plan. See the full rules in the down payment guide.
See what you can afford with your own numbers →
Withdrawing for your home
To take money out of an FHSA tax-free, the CRA requires you to meet these conditions when you withdraw:
- You're a resident of Canada.
- You're still a first-time buyer. At withdrawal, only homes you owned count, not your spouse's.
- You have a written agreement to buy or build a home in Canada, closing before October 1 of the year after the withdrawal.
- You intend to live in it as your main home within a year of buying it.
- You didn't buy the home more than 30 days before the withdrawal.
You apply with Form RC725, which you give to the bank or brokerage that holds your FHSA. Start a few weeks before closing; your lawyer needs the money in hand before the closing date.
Using the FHSA and the Home Buyers' Plan together
You can use the FHSA and the Home Buyers' Plan on the same home. The FHSA gives you up to $40,000 with nothing to repay, and the RRSP Home Buyers' Plan lets you withdraw up to $60,000 more, which you repay over 15 years.
That's up to $100,000 per person, or $200,000 for a couple who each have both. Read the Home Buyers' Plan guide →
FHSA vs RRSP vs TFSA for a down payment
| FHSA | RRSP (Home Buyers' Plan) | TFSA | |
|---|---|---|---|
| Deductible going in | Yes | Yes | No |
| Tax-free coming out for a home | Yes | Yes | Yes |
| Most you can use for a home | $40,000 | $60,000 | All of it |
| Has to be paid back | No | Yes, over 15 years | No |
| If you don't buy | Moves to your RRSP tax-free | Stays in your RRSP | Stays in your TFSA |
The FHSA is the only one of the three that's deductible going in and tax-free coming out with nothing to repay.
If you don't end up buying
If you don't buy a home, you can transfer your FHSA money to your RRSP or RRIF, and it doesn't use any of your RRSP contribution room. For anything else, talk to an accountant.
According to the CRA, the account has to close by the end of the year of the 15th anniversary of opening it, the end of the year you turn 71, or the end of the year after your first qualifying withdrawal, whichever comes first.
Mistakes to avoid
- Opening late. Room doesn't build until the account exists.
- Buying first, withdrawing later. You can't make a tax-free withdrawal more than 30 days after you buy.
- Assuming your spouse's home doesn't count. It does when you open the account.