Definition
The First Home Savings Account (FHSA) is a tax-advantaged account introduced on April 1, 2023, for Canadian first-time buyers. It combines the best of RRSP and TFSA: contributions deductible from income (like RRSP) and withdrawals tax-free for purchase (like TFSA).
Limits: CA$8,000 per year, CA$40,000 lifetime. Unused room partially carries forward (max CA$8,000 per year). Maximum duration: 15 years after opening, or until age 71, whichever comes first. The account can be opened from age 18 (19 in some provinces).
Use: to benefit from the tax-free withdrawal, you must have signed a purchase or build agreement for an eligible principal residence before October 1 following the withdrawal date. Combining FHSA + HBP is permitted and strongly recommended: for a first-time buying couple maximizing both, you can reach CA$200,000 of tax-optimized down payment (CA$80,000 FHSA + CA$120,000 HBP).