FHSA: for your first home
The First Home Savings Account — deduction going in, tax-free coming out, and why you open one now even if you can't fund it yet. Full write-up in progress.
Still being written
Short version below. The full piece — qualifying-home rules, what happens if you never buy, combining it with the Home Buyers' Plan — is coming.
The FHSA is the rare account that works like an RRSP on the way in (you get a deduction) and like a TFSA on the way out (no tax when you withdraw for a qualifying first home). If buying a first home is anywhere on your horizon, it's usually the first place a spare dollar should go.
Open one now
FHSA room only starts accruing once you open an account — there's no retroactive room like the TFSA. Opening one with $0 in it still starts the clock.
Your room
- $8,000 per year, starting the year you open the account.
- Unused room carries forward, but only up to $8,000 — so the most you can contribute in a single year is $16,000.
- $40,000 lifetime limit.
- Opened in 2023 and never contributed? You'd have $32,000 of room available in 2026 (2023–2026 × $8,000), toward that $40,000 cap.
The window
You have 15 years from opening (or until the year you turn 71) to use it. If you don't buy a qualifying home, the balance can roll into your RRSP without using RRSP room.
— Max Wealth. Not financial advice; this is my own experience.
TFSA: the flexible one
The Tax-Free Savings Account — how the room works, why withdrawals are different, and where it fits. Full write-up in progress.
RRSP: the tax-deferral one
The Registered Retirement Savings Plan — a deduction now, tax later, and when that trade actually pays off. Full write-up in progress.