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Is a First Home Savings Account (FHSA) Right for Me?

Whether you’re dreaming of owning your first home or still deciding, a First Home Savings Account (FHSA) can help. It’s a registered plan that makes saving for your first home easier, faster and tax-free1,2. That way, you can be ready to buy when the time comes.

FHSA At-a-Glance

  • Contribute up to $8,000 each year3 ($40,000 lifetime limit)
  • Contributions are tax-deductible3 and could lower your tax bill
  • Pay $0 tax on your investment earnings and $0 tax on withdrawals used to buy a qualifying home2

Select a Scenario to See How the FHSA Can Help You

I’m not sure when I’ll be ready to buy my first home.

 
 

I’m not sure when I’ll be ready to buy my first home.

The FHSA gives you a lot of time and flexibility to save up for your first home.

Once you open your account, you can put money away for up to 15 years before you have to use your savings to buy a home4.

Just remember—the sooner you open your FHSA and make regular contributions, the more time your future down payment will have to grow! Plus, you’ll start accumulating contribution room as soon as you open the account—and unused contribution room can be carried forward to the following year3.

I want to supplement my funds from the RRSP Home Buyers’ Plan (HBP).

 
 

I want to supplement my funds from the RRSP Home Buyers’ Plan (HBP).

Increase your buying power by using both the Home Buyers’ Plan (HBP) and an FHSA toward the purchase of your first home.

Here’s how:

  • Borrow up to $35,000 from your Registered Retirement Savings Plan (RRSP) to buy a home under the HBP.
  • Contribute up to $40,000 to your FHSA.

With money from the HBP and a FHSA, you could have up to $75,000 (or more) tax-free for your down payment! ($35,000 from RRSP + $40,000 from FHSA + potential FHSA investment earnings)

Plus, you don’t have to repay the funds in an FHSA like you do through the HBP.

I’ve maxed out my TFSA and RRSP.

 
 

I’ve maxed out my TFSA and RRSP.

First of all, congratulations on maxing out contributions to your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP).

If you’re , you can contribute up to $8,000 per year ($40,000 lifetime limit), tax-free, in an FHSA to buy your first home.

If you have any money left in your FHSA after you buy a qualifying home, you can transfer it to your RRSP or Registered Retirement Income Fund (RRIF) tax-free!

I owned a home 4+ years ago and want to buy again.

 
 

I owned a home 4+ years ago and want to buy again.

Here’s a bit of fantastic news—you are considered a first-time homebuyer if you (and/or your spouse or common-law partner) haven’t owned a home (that you also lived in) in the four years prior to this year.1 That means you can open an FHSA to save for your next home, tax-free!

I’m on the fence about buying a home but want to save just in case.

 
 

I’m on the fence about buying a home but want to save just in case.

If you’re not sure you will buy a home you can still open an FHSA, provided you meet all the eligibility requirements. You will have 15 years to use your savings to buy a home.

If you choose not to buy a home or don’t think you’ll need all the money in your FHSA to buy one, you can transfer any unused or leftover funds to your Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF), tax-free, without impacting your RRSP contribution room4.

Just keep in mind that you have to transfer the money before December 31 of the year after you make a qualifying withdrawal or turn 71, whichever comes first.

I want to buy a home within the next year.

 
 

I want to buy a home within the next year.

Getting close to buying your first home? Even if you plan to make a down payment on a home in the coming months, an FHSA can still help you save for it and reduce your tax bill. Any contributions you make will lower your taxable income this year and your earnings will grow tax-free. Plus, you can make a withdrawal from your FHSA to buy a home at any time without penalty—even if it’s just weeks or months from the time you open your account2,3.

Two Ways to Invest in an FHSA at RBC

Let the pros invest for you

RBC InvestEase

Open an Account

Call your own investing shots

RBC Direct Investing

Open an Account

Want to learn more about the FHSA?

Check out the following resources to help decide if an FHSA is right for you.

You may be eligible to open an FHSA if you or your spouse have never owned a home in which you lived at any time during the part of the calendar year before the account is opened or at any time in the preceding four calendar years.
A qualifying home is defined as a housing unit in Canada that you partially or fully own. Co-operatives that only provide tenancy would not qualify.
You can make tax-deductible contributions of up to $8,000 annually, up to a lifetime contribution limit of $40,000. If you don’t contribute the full $8,000 in a given year, you can contribute the unused amount next year in addition to the $8,000 annual contribution limit. Up to $8,000 of unused participation room can be used annually.
The funds in your FHSA have to be used by December 31 of the 15th year after opening the account, or by December 31 of the year you turn 71, whichever comes earlier. If you have not used the funds in your FHSA by that time, you can transfer the funds from your FHSA on a tax-free basis to your Registered Retirement Savings Plan (RRSP) without impacting your RRSP contribution room, or to your Registered Retirement Income Fund (RRIF). Otherwise, you can withdraw funds from your FHSA, but your withdrawal will be taxed.