First Home Savings Account
Saving for a home? The First Home Savings Account (FHSA) can help. This unique account blends the tax advantages of Registered Retirement Savings Plans (RRSP) and Tax-Free Savings Accounts (TFSA) with tax deductions on your contributions, and tax-free qualifying withdrawals into one efficient tool to help you purchase your first home.
A smarter way to save for a home
Reduce your annual tax bill
Let your assets grow, tax free
Transfer without penalties
- The FHSA is a registered account that allows prospective first-time home buyers to save for a down payment on a tax-free basis
- FHSA contributions are tax-deductible (like an RRSP), and withdrawals to purchase a qualifying first home are non-taxable (like a TFSA).
- The FHSA allows account holders to contribute up to $8,000 annually to a lifetime maximum of $40,000
- You can open an FHSA if you are:
- a Canadian resident
- between 18 and 71 years old
- a first-time homebuyer
- You are considered a first-time homebuyer if you or your spouse/common-law partner did not own the home that you lived in in the year you open an FHSA or the preceding four calendar years
- You must use the funds in your FHSA to purchase a first home within 15 years of opening the plan, or by the end of the year you turn 71.
- Like TFSAs and RRSPs, a tax on overcontributions to an FHSA would apply for each month (or part-month) that the account is over the limit. The tax applies at the rate of 1% of the highest amount of the excess that existed in that month
How you invest is up to you
A self-directed FHSA allows you to choose and manage your own investments within the account. You can buy and sell stocks, bonds, and other securities, giving you greater control over the investment options and potentially greater returns.
What's the best account option for me?
|A registered account that allows prospective first-time home buyers to save for a down payment on a tax-free basis
|A versatile and flexible registered tax-free investing account.
|A tax-deferred registered retirement account
|Annual Contribution Limit: $8,000
|Annual Contribution Limit: $7,000
|Annual Contribution Limit: 18% of the previous years' income, up to $30,780
|Contributions are tax-deductible and qualifying withdrawals are tax-free
|Withdrawals are tax-free
|Contributions are tax deductible. Withdrawals (except in the case of the Home Buyer’s Plan or Lifelong Learning Plan) are subject to withholding tax
|Annual contribution deadline: December 31
|Annual contribution deadline:
Learn more about TFSAs
|Annual contribution deadline: February 29
Learn more about RRSPs
Open a Qtrade FHSA
- To set up an FHSA, complete the application to open a Qtrade FHSA account.
- If you have an existing FHSA account, it can be transferred from one provider to another without tax consequences. The transfer process involves opening a new FHSA account with Qtrade and initiating a transfer request from the existing account.
Frequently asked questions
You can open an FHSA if you are:
- a Canadian resident
- between 18 and 71 years old
- a first-time homebuyer***
***You are considered a first-time homebuyer if you or your spouse/common-law partner did not own the home that you lived in in the year you open an FHSA or the preceding four calendar years.
You are allowed to contribute up to $40,000 over your lifetime to an FHSA and up to $8,000 in any calendar year.
Like with an RRSP, your annual FHSA contributions can be claimed as an income tax deduction for contributions made in that year. However, unlike an RRSP, your FHSA contributions made during the first 60 days of the calendar year cannot be used for tax deductions for the previous year. Unused contribution room can carry forward to the following year up to a maximum of $8,000.
Just like with other registered plans, you can have more than one FHSA, but the total combined amount you can contribute to all your accounts cannot exceed your annual and lifetime FHSA contribution limits.
Like TFSAs and RRSPs, a tax on overcontributions to an FHSA would apply for each month (or part-month) that the account is over the limit. The tax applies at the rate of 1% of the highest amount of the excess that existed in that month.
If you use your FHSA savings to buy a home, a withdrawal from your FHSA will not be taxable. To qualify, your withdrawal must meet the following conditions:
- You must be a first-time homebuyer
- You must be a Canadian resident
- You must have a written agreement to buy or build a qualifying home (located in Canada) before October 1 of the year following the year of withdrawal
- Your new home must be your principal place of residence within one year of buying/building it
Once you’ve made a non-taxable withdrawal from your FHSA to purchase a home, you must close your FHSA before the end of the year following the withdrawal[BG1] , and would not be eligible to open another FHSA.
If you take funds from your FHSA as a non-qualifying withdrawal, you must include the amount in income for the year of the withdrawal and tax will be withheld (much like a withdrawal from your RRSP).
The FHSA is an individual account, so you cannot open a joint FHSA. However, you and your spouse/partner can each open individual FHSAs, as long as you both meet the criteria. This allows you to both contribute up to the $40,000 maximum in your respective accounts and use the funds toward a down payment to jointly purchase a qualifying home.
You must use the funds in your FHSA to purchase a first home within 15 years of opening the plan, or by the end of the year you turn 71.
If you don't use your FHSA to buy a home, you can transfer the funds to an RRSP or RRIF account. The transfer would not impact your RRSP’s available contribution room.
You can also simply withdraw the funds from your FHSA, but the amount would be subject to withholding tax and be included as income on your tax return.
Currently, the Home Buyers’ Plan (HBP) allows first-time homebuyers to withdraw up to $35,000 tax-free from their RRSP to purchase or build a new home. However, you must pay that money back to your RRSP within 15 years. In an FHSA, you are not required to pay back the funds withdrawn toward the purchase of a qualifying home.
At this time, the HBP is still available, allowing you to make use of both FHSA withdrawals and HBP withdrawals toward a qualifying home purchase.
The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters.