Mastering the Canadian FHSA: A Guide for First-Time Home Buyers

The First Home Savings Account (FHSA) is arguably the most powerful wealth-building tool introduced for Canadians in decades. It combines the best features of an RRSP (tax deductions) and a TFSA (tax-free withdrawals).

Why the FHSA is a "Cheat Code" for Home Ownership

If you earn $100,000 in Ontario and contribute the maximum $8,000 to your FHSA, you could see a tax refund of approximately $3,000. That's $3,000 in "free money" from the government just for saving for your own home.

2025 Contribution Rules

• Annual Limit: $8,000 per year.
• Lifetime Limit: $40,000 total.
• Carry-forward: You can carry forward up to $8,000 of unused room to the following year (max $16,000 total in any one year).

The "Double Dip" Strategy

You can combine your FHSA with the Home Buyers' Plan (HBP) from your RRSP. This allows you to pull up to $35,000 from your RRSP plus your entire FHSA balance—all tax-free!

Pro Tip: Open your FHSA account as soon as possible, even if you only contribute $1. The 15-year "clock" for the account starts the year you open it.

How to Maximize Your Benefits

1. Contribute Early: The earlier you contribute, the more time your investments have to grow tax-free.
2. Reinvest Your Refund: Take that ~$3,000 tax refund and put it into your TFSA or next year's FHSA room.
3. Use the TaxEase Planner: Our specific FHSA calculator can show you exactly how many years you'll shave off your down payment goal.

Buying a home in Canada is challenging, but the FHSA is a significant leg up. Make sure you're using it to its full potential.