Updated October 2026 with the current CRA rules. First published July 2023.
The First Home Savings Account is the best tax deal Canada has ever offered first-time buyers. Money goes in tax-deductible, like an RRSP, and comes out tax-free for a home, like a TFSA, with nothing to pay back. Each buyer can shelter $40,000, and a couple using it alongside the RRSP Home Buyers' Plan can put up to $200,000 toward a Greater Victoria down payment.
In this guide
How the FHSA works
The FHSA has been available since April 1, 2023 at banks, credit unions, trust companies and online brokerages. It combines the two best features of Canada's other registered accounts:
Contribute and deduct
Contributions reduce your taxable income, the way RRSP contributions do. You can claim the deduction now or carry it forward to a higher-income year, even after the account is closed.
Grow tax-free
Interest, dividends and gains inside the account are not taxed. Growth does not use up your contribution room.
Withdraw tax-free
A qualifying withdrawal for your first home is not taxed and never has to be paid back. That is the big difference from the RRSP Home Buyers' Plan.
Who can open one
You must meet all of these on the day you open your first FHSA:
- A resident of Canada.
- At least 18, and in practice 19 in BC. CRA notes that where the age to sign a contract is 19, as it is in British Columbia, you need to be 19 to open the account.
- No older than 71 on December 31 of the year you open it.
- A first-time home buyer. In the current year, or at any time in the previous four calendar years, you did not live as your principal residence in a home that you owned, or that your current spouse or common-law partner owned.
The spouse rule applies only when you open the account. If your partner already owns the home you share, you cannot open an FHSA while you are together. If you are single when you open it, a later partner's home does not take away your account.
Limits and carry-forward
You get $8,000 of room in the year you open your first FHSA and $8,000 in each later year, up to $40,000 in total. Unused room carries forward, but only up to $8,000, so the most you can ever put in one year is $16,000. Room only starts once an account exists, which is the single most important thing to know about the FHSA.
Opening early pays: one buyer's FHSA room, year by year
She opens an FHSA in 2026 but contributes nothing that year. Her unused $8,000 carries into 2027, so she can put in $16,000 that year and reach the $40,000 limit in 2030. This is the example CRA uses.
The limits apply to all your FHSAs combined. Unlike an RRSP, contributions made in the first 60 days of a year cannot be deducted on the previous year's return. If you go over your room, CRA charges 1% a month on the highest excess in each month until you remove it.
What the FHSA is worth
Tax refund on an $8,000 contribution
The refund is your marginal tax rate times the deduction. Illustrative rates; your own rate depends on your income.
Over five years the numbers add up. Put in $8,000 a year for five years and earn 4% a year, and the account holds about $45,064: your $40,000 plus about $5,064 of growth, all of it tax-free when you buy. At a 30% marginal rate the deductions also return about $12,000 in tax refunds along the way, which many buyers put straight back into the account or toward closing costs. The return is an example only; what you earn depends on what you hold.
Withdrawing for your home
To take the money out tax-free you complete CRA Form RC725 and give it to your FHSA provider. The withdrawal qualifies when all of these are true:
- You are still a first-time buyer. The same four-year test applies, except that you can already have moved into the new home, as long as it was no more than 30 days before the withdrawal.
- You have a written agreement to buy or build a home in Canada, with the purchase or construction completing before October 1 of the year after the withdrawal.
- You did not buy it more than 30 days before the withdrawal. Plan the timing with your lawyer or notary so the funds arrive for completion.
- You plan to live there as your principal residence within one year of buying or building it.
- You stay a resident of Canada from the first withdrawal until you complete the purchase.
You can take the money in one withdrawal or several. Once you make your first qualifying withdrawal, the clock changes: the account must be closed by the end of the following year, and anything you contribute after that first withdrawal cannot be deducted.
FHSA, Home Buyers' Plan or TFSA?
You do not have to choose. CRA confirms you can use an FHSA withdrawal and the RRSP Home Buyers' Plan for the same home, and a TFSA on top. The order usually matters more than the choice.
| FHSA | RRSP Home Buyers' Plan | TFSA | |
|---|---|---|---|
| Limit for a home | $40,000 lifetime | Withdraw up to $60,000 | Your available room |
| Contributions deductible? | Yes | Yes (as RRSP contributions) | No |
| Withdrawal taxed? | No | No, if repaid | No |
| Must you repay? | Never | Yes, over 15 years | No; room returns the next year |
| When repayment starts | n/a | Fifth year after the withdrawal for first withdrawals from 2022 to 2028; otherwise the second year | n/a |
| First-time buyer only? | Yes | Yes (four-year test) | No |
Up to $200,000 toward a down payment for a couple
Two first-time buyers who each max out an FHSA ($40,000) and use the Home Buyers' Plan ($60,000 from their RRSPs). Only the HBP part has to be paid back.
For most buyers the FHSA should come first, because it gives both the deduction and a tax-free withdrawal with no repayment. The Home Buyers' Plan suits people who already have RRSP savings, and it was made more generous in 2024 (the limit rose from $35,000 to $60,000) and again in 2026, when the five-year repayment grace period was extended to first withdrawals made up to the end of 2028. You can also move RRSP money into an FHSA by direct transfer, up to your FHSA room. That transfer is not deductible again and does not restore your RRSP room, but it lets the money come out tax-free without the HBP repayments.
What an FHSA covers in Greater Victoria
Minimum down payment at today's Victoria benchmark prices
Minimum down payment under federal rules (5% of the first $500,000, 10% of the rest up to $1.5 million) at the Victoria Real Estate Board's September 2026 benchmark prices for the Victoria Core. The dashed line is one buyer's full FHSA ($40,000); a couple with two FHSAs has $80,000.
On a condo at the Victoria Core benchmark of $547,800, one person's full FHSA more than covers the $29,780 minimum down payment. On a detached house at the $1,280,100 benchmark the minimum is $103,010, so a couple with two full accounts gets most of the way there, and the Home Buyers' Plan can cover the rest. With less than 20% down the mortgage must be insured, and since December 15, 2024 first-time buyers can choose a 30-year amortization on an insured mortgage, with the insured price cap raised to $1.5 million.
See what those budgets buy today: lower-priced condos, lower-priced townhomes, lower-priced houses and new condos across Greater Victoria, or our study of what $1 million buys in 30 neighbourhoods.
Other help for first-time buyers in BC
BC property transfer tax exemption
First-time buyers pay no transfer tax on the first $500,000 of a home worth up to $835,000, a saving of up to $8,000. The saving shrinks above $835,000 and ends at $860,000. On a $547,800 condo the tax falls from $8,956 to $956.
Newly built home exemption
No transfer tax on a new home worth up to $1.1 million that will be your principal residence, with a partial exemption up to $1.15 million. You do not have to be a first-time buyer.
First-time buyers' GST rebate
Up to $50,000: the full 5% GST on a new home up to $1 million, phasing out to nothing at $1.5 million. It applies to builder agreements signed from March 20, 2025 until the end of 2030, and became law in March 2026.
Home buyers' tax credit
A $10,000 non-refundable credit in the year you buy. Because the lowest federal tax rate was cut to 14%, it is worth $1,400 for 2026 purchases (it was $1,500 until 2024). Spouses can split it.
Each program has its own definition of first-time buyer and its own occupancy rules; the BC exemptions, for example, require you to move in within 92 days and live there for the first year. Read more in our guides to the home buyer rescission period and the foreign buyers ban.
If you never buy a home
An FHSA has a maximum participation period. It ends on December 31 of the year in which the earliest of these happens:
- the 15th anniversary of opening your first FHSA,
- you turn 71, or
- the year after your first qualifying withdrawal.
Before then you can move what is left, by direct transfer, into your RRSP or RRIF. The transfer is tax-deferred and does not use any RRSP room, which makes the FHSA useful even for people who end up renting: it works as up to $40,000 of extra RRSP room. You can also take the money out as a taxable withdrawal. Anything still in the account after the period ends loses its status and its value is added to your income.
Special situations
Can my spouse and I both open an FHSA?
Yes. The FHSA is an individual account, so each of you can have one and each gets $8,000 a year and $40,000 in total. You cannot contribute to your partner's account and claim the deduction, but you can give your partner money to contribute. Each of you must pass the first-time buyer test when you open your own account.
Can I use my FHSA and the Home Buyers' Plan for the same home?
Yes. CRA allows a qualifying FHSA withdrawal and HBP withdrawals for the same home, as long as you meet the conditions of each program at the time of each withdrawal.
Can I keep contributing after I buy?
Contributions made after your first qualifying withdrawal cannot be deducted, and the account has to be closed by December 31 of the year after that first withdrawal. In practice, make your last deductible contribution before you withdraw.
What can I hold in an FHSA?
The same kinds of qualified investments allowed in an RRSP or TFSA: cash, GICs, mutual funds and ETFs, most publicly traded stocks and bonds. Your provider may limit the choice. If your purchase is a year or two away, many buyers keep the money in cash or GICs so a market drop does not shrink the down payment.
What happens if I contribute too much?
CRA charges 1% a month on the highest excess amount in each month until it is removed. You can fix it with a designated withdrawal or a designated transfer to your RRSP or RRIF (Form RC727), and you report the tax on Form RC728.
What happens to an FHSA when the holder dies?
A spouse or common-law partner can be named successor holder and simply takes over the account if they qualify to hold one. Otherwise the money can be transferred tax-deferred to the surviving spouse's FHSA, RRSP or RRIF. Other beneficiaries, or the estate, are taxed on what they receive.
I am moving away from Canada. What happens to my FHSA?
You can keep the account, but you must be a resident of Canada to make a qualifying withdrawal and remain one until you buy. Withdrawals made while you are a non-resident are taxable and subject to withholding tax.
I just moved to Canada. Can I open one?
Yes, once you are a resident, if you pass the first-time buyer test. A home you owned and lived in outside Canada counts, so you cannot open an FHSA in a year you lived in one or in the four years after.
I am a U.S. citizen living in Victoria. Should I open an FHSA?
Get cross-border tax advice first. The IRS has issued no FHSA guidance, and advisers generally treat the account as having no special U.S. status, which can mean U.S. tax on the growth each year and extra reporting.
What if my marriage or common-law relationship ends?
Under a court order or a written separation agreement, FHSA money can be transferred directly to your current or former spouse's or partner's FHSA, RRSP or RRIF, using CRA Form RC723. The transfer does not give you back the room you used.
Does a qualifying withdrawal count as income?
No. A qualifying withdrawal is not included in your income, so it does not affect income-tested benefits or credits. A taxable withdrawal is included in income in the year you take it.
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Lower-priced condosHow to win a bidding warPhotos from Wikimedia Commons, used under the licences linked in each caption.