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Buying your first home?

Get started with a First Home Savings Account

What's a First Home Savings Account (FHSA)?

Launching in Spring 2023, a First Home Savings Account is a new government registered plan and tax-free way to help you save for your first home. When you contribute up to $8,000 per year, the amount invested is tax-deductible, like an RRSP. This means you can reduce your yearly taxable income by the amount you contribute. Any money you earn on top of your investments will also be tax-free if you withdraw it to purchase a new home, like an TFSA.  

Get notified when the FHSA is available at Gulf & Fraser.

3 ways to save on taxes with the FHSA

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Lower your year-end income taxes with tax-deductible contributions

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Grow your investments tax-free. Interest earned on your savings is tax-sheltered.

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When you're ready to buy your first home, your withdrawal is not taxable.

Benefits to investing in an FHSA:


Save on taxes – your contributions are tax-deductible


Grow your investments tax-free for up to 15 years


Carry forward any unused contribution room for as long as you have the account


Pair it with a Home Buyers' Plan (HBP) to make the most of your savings


Save up to $40,000 for your first home


FHSA key facts


Yearly tax-deductible FHSA contribution limit


Lifetime FHSA contribution limit


The amount you'll pay in taxes on FHSA earnings*

*If you make a qualifying withdrawal to use for your first home purchase

How does this play out in real life? Let's take a look at Jasmine.

Jasmine lives in Vancouver and has just landed a new job with a salary of $50,000 per year and now wants to start saving up for her first home. She hears about the benefits of an FHSA and how it can help her save up to $40,000 with all growth being tax-free, so she decides to open an account. Over the next five years, Jasmine contributes $8,000 to her FHSA each year. She’s happy to see her savings grow, but even more excited to learn about the income tax savings she received over five years. Based off her annual income, she saved a total of $11,165 in income taxes! She’s also thrilled to see that her contributions earned her a total of $6,415 in tax-free interest over the past five years.


Total income tax savings based on $50,000 income


Total tax-free interest earned in 5 years, based on maximum contributions and 5% growth


Total value of your savings in 5 years

After five years of contributing to her FHSA with the hopes of buying her first home, Jasmine saved a total of $57,580 – that’s $17,580 more than she contributed! She’s now financially ready to take her next step and become a homeowner.


I like the sound of an FHSA - am I eligible?

An FHSA will be available to Canadian residents who:

  • Have a valid Social Insurance Number (SIN)
  • Are at least 18 years old
  • Haven't owned a home in the past four years*
*For example, if you bought a home in 2012 and sold it in 2017, you would still be considered a first-time homebuyer for the purposes of an FHSA.

How is an FHSA different from a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP)?


Savings account.

Retirement savings account First home savings account
Key features

Investment earnings and withdrawals are tax-free.

Contributions are tax-deductible and investment earnings are taxed as income when you withdraw.

Contributions are tax-deductible and investment earnings and withdrawals are tax-free if used to purchase your first home.

Contribution limit

Fixed contribution limit is added annually plus any unused contribution room from the previous years and any amount you have withdrawn.

Find out the current contribution limit here.

Contribution limit is 18% of your previous year’s income, up to a maximum limit determined annually. 

Find the current year’s contribution maximum here.

$8,000 annually, plus up to $8,000 of your unused contribution room, up to a maximum lifetime limit of $40,000.

Withdrawal criteria

Withdrawals can be made anytime but they are dependent on the type of account your TFSA is in.

Withdrawals can be made anytime but they are taxable and are dependent on the type of account your RRSP is in.

You can withdraw from your RRSPs under Home Buyer’s Plan (HBP) and Lifelong Learning Plan (LLP) and your RRSP issuer will not withhold tax.  
Withdrawals can be made tax-free if you’ve signed a contract to purchase a home. They can also be made if you are residing in the house within a year of purchasing or constructing the house.

Save for your first home, tax-free

Sign up below and get notified when the FHSA is available at Gulf & Fraser


No, it will not impact your eligibility for the Home Buyer’s Plan (HBP). You can use both to save for a down payment for your first home. The key difference between the FHSA and HBP is that the HBP is a plan that allows you to withdraw up to $35,000 from your RRSP which then must be paid back to your RRSP over 15 years.
No you can’t directly participate in your spouse’s FHSA. Only the holder of the FHSA can claim the contributions for tax deductions.
You can transfer from your RRSPs to your FHSA without any immediate tax consequences, as long as it is a direct transfer, and does not exceed your unused FHSA participation room at the time of the transfer.
You can open more than one FHSA but the total amount you can contribute and transfer from your RRSP’s cannot be more than your FHSA contribution limit for the year.
You have to pay a tax of 1% per month on the highest excess FHSA amount in that month. You will continue to pay the monthly 1% tax until the excess FHSA amount is eliminated. Your excess FHSA amount will be reduced or eliminated by your new FHSA participation room (on January 1 of the following year), or by removing amounts from your FHSAs.