First Home Savings Account (FHSA)

What is a FHSA?

Get closer to home ownership with tax-free savings

he Tax-Free First Home Savings Account (FHSA) was introduced in Canada on April 1, 2023, as a new registered plan following the Tax-Free Savings Account (TFSA). Designed to assist first-time homebuyers, FHSA combines the tax benefits of TFSA and RRSP.

Contributions, investment income, and growth in FHSA are all tax-free, and withdrawals for a first home purchase are also tax-exempt, offering convenient and favorable financial support for homeownership dreams.

How FHSA work?

  • Annual contributions are capped at $8,000 up to a $40,000 lifetime contribution limit.
  • A maximum of $8,000 unused contribution room can carry forward to the following year.
  • The account can stay open for a maximum 15 years4 or until the end of the year you turn 71

Where to open a FHSA account?

Most financial institutions can open a FHSA account. For example: banks, credit unions, trust and loan companies, insurance companies.

Who can open a FHSA account?

If you wish to open an FHSA account, you must meet at least…

  • Be at least 18 years old and less than 71 years old by December 31 of the current year to qualify for opening an FHSA account.
  • The account holder must be a resident of Canada.
  • In the current year and the past four years, neither the account holder nor their spouse must have owned a property in Canada, and neither has designated any property owned by them or their spouse as their principal residence.

The FHSA account can be held for a maximum of 15 years. Accounts can be opened through various financial institutions that offer TFSA and RRSP services, including banks, credit unions, life insurance companies, and Canadian trust companies.

Open an account with as little as $50.

You don’t need to wait until having a lot of money to start investing. The key to investing is to “start,” not to “prepare.”

FHSA Contribution and withdrawal requirements

After opening an account, there is an annual contribution limit of $8,000, with a lifetime maximum contribution limit of $40,000 per individual or $80,000 for a couple. Unused contribution room, up to $8,000, can be carried forward to the next year. 

For example, if you open an FHSA in 2023 and contribute $5,000, you can contribute a maximum of $11,000 in 2024. The carried-over amount accumulates only after opening an FHSA. Multiple FHSAs can be opened, but the total contributions across all accounts must not exceed the annual and lifetime contribution limits.

Because the FHSA savings account is designed to assist homebuyers, only withdrawals for the purpose of purchasing a home are eligible for tax-free treatment. To qualify for eligible withdrawals, you must:

  • Be a first-time homebuyer in Canada;
  • Reside in Canada at the time of withdrawal;
  • Have a written agreement to purchase or build a home in Canada by October 1 of the year following the withdrawal year. For example, if you plan to withdraw funds from your FHSA account on December 1, 2023, you must have such an agreement in place by October 1, 2024.
  • Intend to use the home as your principal residence within one year after purchasing or building it.

If your withdrawal does not meet the above conditions, it will be considered ineligible.

Withdrawals from FHSA that do not meet the conditions will be added to your taxable income, potentially resulting in a significant tax liability. Your FHSA issuing institution will also withhold taxes on non-qualified withdrawals, consistent with the treatment applicable to taxable RRSP withdrawals. It is important to note that penalties can be substantial, so extra caution is advised.

However, you can transfer money from your FHSA savings account to an RRSP or RRIF tax-free. These transfers won’t reset your lifetime FHSA contribution limit but also won’t reduce your RRSP contribution room.

What types of products can be held in a FHSA

A FHSA account can hold various income-generating investment products, depending on investment objectives and risk preferences.

For example: cash, Guaranteed Investment Certificates (GICs), bonds, mutual funds, Segregated Funds, exchange-traded funds (ETFs), and stocks.

Why should I open an FHSA with Ai Financial?

Individuals may claim an income tax deduction for eligible FHSA contributions. 

Our investment capabilities can maximize the assets in your FHSA within 5 years. Customize your portfolio to suit your risk tolerance and investing horizon.

With a FHSA, you won’t pay tax on any growth on investments while it’s in your account and you have the flexibility to transfer your FHSA funds to an RRSP or RRIF.

Ai Financial services on FHSA

Your One-Stop Shop for Segregated Funds

We open accounts for clients in financial institutions such as iA and Manulife and invest in segregated funds; we can also help clients transfer the funds required for FHSA from other institutions (according to different needs).

For more information about investing with FHSA, please visit Invest with FHSA.

Additional information


  • You must be a first-time homebuyer and a resident of Canada at the time of the withdrawal for the acquisition of your qualifying home.
  • A “qualifying home” is defined as a housing unit located in Canada. It also includes a share of the capital stock of a cooperative housing corporation, where the holder of the share is entitled to possession of a housing unit located in Canada.
  • 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.
  • You must also intend to occupy the qualifying home as your principal place of residence within one year of buying or building it.
  • You can transfer funds from your RRSP to your FHSA on a tax-free basis. These transfers are subject to FHSA annual and lifetime contribution limits. Such transfers are not deductible from income.
  • Transfers from an RRSP to an FHSA do not restore your RRSP contribution room.
  • In-kind transfers will not be available for the FHSA at this time.

If you’re in Canada on a visa, you can open an FHSA if you’re a Canadian resident for tax purposes who has a SIN or temporary SIN. In addition to being the age of majority in your province or territory of residence, you must also meet the criteria for a “first-time homebuyer”.

To be considered a first-time homebuyer, you must not have lived in as a principal place of residence at any time during the part of the calendar year before the account is opened or at any time in the preceding four calendar years, a “qualifying home” (or what would be a qualifying home if it was located in Canada) that either you owned or your spouse or common law partner owned (if you have a spouse or common law partner at the time of opening the account).


It’s not possible to directly transfer your TFSA to an FHSA. You first have to withdraw the money from your TFSA and then contribute it to your FHSA. It’s also important to be aware of how the TFSA withdrawal may affect your available TFSA contribution room.

Yes, you can carry forward any unused contributions up to $8,000 in any year. Your carry-forward amounts will only start accumulating once you’ve opened an FHSA for the first time. 

Yes. You can use savings from your RRSP Home Buyers’ Plan (the HBP) and your FHSA towards the purchase of the same qualifying home purchase.

Learn more about how the RRSP


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