The First Home Savings Account is a new tax-advantaged account that combines the power of a TFSA and RRSP to help Canadians save a down payment.

Contributions for your First Home Savings Account (FHSA) are tax-deductible, and withdrawals are tax-free, giving you the best of both worlds while investing for your first home purchase.

Canadians can contribute up to $8,000 annually, up to a maximum of $40,000. However, unlike similar government programs (RRSP and RESP), the annual amount is not retroactive until the date you open one. For example, if you open a FHSA in 2025, you cannot use the $16,000 contribution limit from 2023 and 2024 in 2025. But if you open a FHSA in 2023 but you do not make deposits until 2025, you will have the $16,000 extra room for that year and the $40,000 total.

So if you think you might use a FHSA as you prepare to buy your first home, I suggest opening one right away.

Let’s talk about a plan to get you into your first home.