Grow your investments tax-free, and withdraw your funds tax-free anytime.
CIBC Investor’s Edge Jan. 19, 2026
7-minute read
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Buying a first home isn’t what it used to be. Housing prices, inflation and rising interest rates have created a challenge for many Canadians trying to break into the real estate market. To help potential first-time home buyers, the federal government has introduced the FHSA (First Home Savings Account), a new tax-free registered plan where you can contribute up to $40,000 lifetime limit towards the purchase of a qualifying first home.
To help you get more familiar with the FHSA, we answer some of your most common questions.
What is the FHSA?
The FHSA is a new registered plan designed to help Canadians break into the housing market and save for a qualifying first home. A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units and apartments in duplexes, triplexes, fourplexes or apartment buildings all qualify. A share in a co-operative housing corporation that entitles you to possession, and gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
Do I qualify for the FHSA?
To qualify for the FHSA, you must be:
A Canadian resident with a Social Insurance Number (SIN)
The age of majority: 18 or 19 years of age, depending on your province or territory of residence
A first-time homebuyer
Am I a first-time homebuyer for the FHSA?
You’re considered a first-time homebuyer when you open an FHSA if, at any time in the calendar year before the account is opened or at any time in the preceding four calendar years, you did not live in a qualifying home — or what would be a qualifying home if located in Canada — as your principal place of residence that either:
You owned or jointly owned
Your spouse or common-law partner owned or jointly owned
How much money can I put into an FHSA?
Eligible Canadians can contribute, or transfer from their Registered Retirement Savings Plan (RRSP), up to $8,000 per year into their FHSA, up to a lifetime maximum of $40,000. If you contribute less than the $8,000 annual contribution limit, the unused contribution room would be added on to your annual limit for the following year, up to a maximum of $8,000.
For example, if you contributed $4,000 to your FHSA in 2023, you would be able to contribute $12,000 in 2024 — $8,000, plus the remaining $4,000 from 2023.
What tax advantages do I get from an FHSA?
1. Get a tax deduction when you contribute
When you contribute to an FHSA, you can claim a tax deduction on your tax return. For example, let’s say you contribute the full $8,000 in the first year and your tax rate is 25%. This would give you a potential tax savings of $2,000. Do this for five years and you’ve got a total potential tax savings of $10,000. You can claim the tax deduction in the year of contribution, or in a future year. Note, however, that transfers to your FHSA from your RRSP are not eligible for a tax deduction because you would have already received a tax deduction when you contributed those funds to your RRSP.
2. Grow your investments tax-free
Like all registered plans, you can keep the money you contribute to your FHSA in cash or use it to invest in guaranteed income certificates (GICs), bonds, stocks, mutual funds and exchange-traded funds (ETFs). For investments outside of a registered plan, any income or gains earned are taxable.
3. Withdraw your money tax-free
Let’s fast-forward to when you’re ready to buy a qualifying first home. You can take the money out of your FHSA — including your original contributions and any investment earnings — without paying any tax on it to purchase that qualifying first home.
The FHSA combines some of the best features of the RRSP and Tax-Free Savings Account (TFSA):
Like the RRSP, get a tax deduction on money you put in.
Like the TFSA, get a tax-free withdrawal on money you take out. Note that with the TFSA, you can withdraw money tax-free for any purpose, but with the FHSA, you can only withdraw money tax-free when buying a qualifying first home.
Can I use both the FHSA and the RRSP Home Buyer’s Plan?
You don’t have to choose just one way to save. When you’re ready to buy a qualifying first home, you can withdraw money from your FHSA and also withdraw money from your RRSP under the Home Buyers’ Plan (HBP).
The RRSP HBP lets you withdraw up to $60,000 tax-free from your RRSP to help buy your first home. However, the amount you withdraw must be repaid to your RRSP within 15 years. Any withdrawals from your RRSP that are used to purchase a home, that are not part of a HBP withdrawal, will be considered taxable income.
Let’s see how much money you can put towards a home when you combine the RRSP Home Buyers’ Plan and the FHSA. The total would be:
$60,000 from your RRSP HBP
plus your FHSA balance, which could be more than $40,000 if you contribute the lifetime maximum and get a positive investment return
So the total from both accounts could exceed $100,000 per person or $200,000 per couple.
Here are key similarities and differences of the FHSA and RRSP:
Question
FHSA
RRSP
Who is eligible?
Canadians 18 or older with a valid SIN
Canadian residents with a SIN who are under age 71, have earned income and file a tax return in Canada
How much can I contribute?
$8,000 annually, plus up to $8,000 of your unused contribution room carried forward from the prior year, up to a maximum lifetime limit of $40,000
18% of previous year’s earned income, less any pension adjustment, up to maximum annual limit — $32,490 for 2025
Are contributions tax-deductible?
Yes
Yes
Do withdrawals have to be repaid?
No
Yes, money withdrawn from your RRSP through the Home Buyer’s Plan has to be paid back into your RRSP in equal payments over the next 15 years.
Can I make tax-free withdrawals?
Yes, to purchase a qualifying first home
Yes, the withdrawals under the HBP are tax-free if you contribute your annual repayment amount back into your RRSP each year. The minimum annual repayment is 1/15 of the amount withdrawn.
Maximum withdrawal limit
No limit
$60,000
What if I change my mind and decide not to buy a home?
You can keep your FHSA open for up to 15 years or until the end of the year when you turn 71, if this is earlier. If you do not use your FHSA to buy a qualifying first home, you have a couple of options:
Transfer the balance of the account on a tax-deferred basis to your RRSP (without impacting your contribution room) or RRIF
Withdraw the funds and pay the required taxes
Your journey to owning a home
Buying your first home is a big milestone, and the FHSA can help you get there with valuable tax benefits. With Investor’s Edge, DIY investors have the freedom to choose and manage their own FHSA investments, whether that’s stocks, ETFs or other options. We provide the tools and resources you need to take control of your savings and make smart decisions on your journey to owning a home. When you’re ready to buy your first home, you’ll know you made the most of your FHSA with Investor’s Edge by your side.
