The Federal Government introduced a new savings vehicle for Canadians wanting to save for their first home.  It’s called the First Home Savings Account. 


Notable features

  • Gives first-time homebuyers the ability to save up to $40,000 on a tax-free basis.

  • Like a Retirement Savings Plan (RSP), contributions are tax-deductible.

  • Withdrawals to purchase a first home - including from investment income - are non-taxable, like a Tax-Free Savings Account (TFSA).


Who is eligible?

  • Canadian residents, at least 18 years old. 

  • First-time homebuyers who have not owned a home in which they lived at any time during the calendar year when the account is open or at any time in the preceding four calendar years.


What is the contribution limit?

  • The lifetime limit on contributions to a FHSA is $40,000, with an annual contribution limit of $8,000. The annual contribution limit applies to contributions made within a particular calendar year.

  • You can claim an income tax deduction for contributions made in a particular taxation year. Unlike RSPs, contributions made within the first 60 days of a given calendar year are not attributable to the previous tax year.

  • You can carry forward unused portions of your annual contribution limit up to a maximum of $8,000. If you contribute less than $8,000 in a given year, you can contribute the unused amount (i.e., $8,000 less your contribution in that year) in a subsequent year on top of your annual contribution limit of $8,000. For example, if you contributed $5,000 to a FHSA in 2023, you would be allowed to contribute $11,000 in 2024 (i.e., $8,000 plus the remaining $3,000 from 2023). Carry-forward amounts only start accumulating after you open a FHSA for the first time.


What happens if I want to make a withdrawal?

  • You must be a first-time homebuyer at the time of a withdrawal, and you can not have owned a home in which you lived in at any time during the calendar year when the withdrawal is made or at any time in the preceding four calendar years.

  • There is an exception that allows you to make qualifying withdrawals within 30 days of moving into your home. You must also have a written agreement to buy or build a qualifying home before October 1 of the year following the year of withdrawal and intend to occupy the qualifying home as your principal residence within one year after buying or building it. Provided you meet the qualifying withdrawal conditions, the entire amount of available FHSA funds may be withdrawn on a tax-free basis in a single withdrawal or a series of withdrawals.

  • Form RC725, Request to Make a Qualifying Withdrawal from your FHSA, must be completed to request your FHSA withdrawal.


How does a FHSA compare with an RSP and TFSA?

Although there are similarities between a FHSA and RSP and TFSA, there are differences you may want to consider before deciding.




(Home Buyers' Plan)


Contributions deductible from income


Withdrawal must be repaid


Withdrawal is tax free




Maximum withdrawal limit


Withdrawal waiting period



Contact your advisor to find out more about how FHSA can be incorporated into your financial plan. If you do not have an advisor and would like to speak to one, call us at 1.800.668.4095 and our customer service team would be pleased to have an advisor in your area contact you.


* If the withdrawal is not used for the purpose of purchasing a first home, it is a taxable withdrawal.

** Withdrawals are tax-deferred (not the same thing as tax free).

** Withdrawal cannot exceed $35,000.

**** RSP proceeds must be invested for at least 89 days before being withdrawn under the Home Buyers' Plan.