Investment

FHSA — Canada's First Home Savings Account Explained (2026)

April 1, 2026 6 min read

The First Home Savings Account (FHSA) is a new registered savings account introduced by the Canadian government in 2023. It is specifically designed to help first-time home buyers save for their first property in Canada.

The FHSA is unique because it combines the best features of both the RRSP and TFSA:

✓ *Like an RRSP*: Contributions are tax-deductible ✓ *Like a TFSA*: Withdrawals for a home are completely tax-free

No other registered account in Canada offers both of these benefits at the same time.

FHSA Contribution Limits

Detail	Amount
---	---
Annual contribution limit	$8,000/year
Lifetime contribution limit	$40,000
Unused room carries forward	1 year (max $8,000 carryover)
Maximum in one year	$16,000 ($8,000 + $8,000 carryover)

Who Qualifies for an FHSA?

To open an FHSA you must: - Be a Canadian resident - Be 18 years of age or older - Be a first-time home buyer

How to Use Your FHSA to Buy a Home

When you're ready to buy: 1. Make a qualifying withdrawal from your FHSA 2. The withdrawal must be for a qualifying first home 3. The entire amount (contributions + growth) comes out tax-free 4. You must close your FHSA by December 31 of the year following your first qualifying withdrawal

FHSA + Home Buyers' Plan (RRSP) — Double Benefit

The FHSA can be COMBINED with the RRSP Home Buyers' Plan:

Account	Tax-Free Withdrawal
---	---
FHSA	$40,000
RRSP (HBP)	$35,000
Total combined	$75,000 for your first home

This is a massive advantage for first-time buyers in Surrey and Metro Vancouver where home prices are high.

FHSA vs RRSP vs TFSA — Quick Comparison

Feature	FHSA	RRSP	TFSA
---	---	---	---
Tax deductible contributions	✅ Yes	✅ Yes	❌ No
Tax-free growth	✅ Yes	✅ Yes	✅ Yes
Tax-free withdrawals	✅ (for home only)	❌ No	✅ Yes
Annual limit	$8,000	18% of income	$7,000
Lifetime limit	$40,000	No limit	No limit