Lesson FHSA 101

First Home Savings Account Overview

Unlock your path to homeownership with the groundbreaking Tax-Free First Home Savings Account.

Young couple moving into new home

What is the Tax-Free First Home Savings Account (FHSA)?

  • A new tax-advantaged account designed to help Canadians save for a down payment
  • Combines the power of the TFSA and RRSP to help prospective first time home buyers
  • Contributions to the FHSA are tax deductible, while withdrawals are tax-free giving you the “best of both worlds” while investing for your home purchase
  • Contribute up to $8,000 per year once opened, up to a lifetime maximum of $40,000

Learn more about the First Home Savings Account in this article.

Speed up your down payment savings

Once your tax-free FHSA is set up, you get $8,000 in contribution room to use now or carry forward

Open an account

How an FHSA works

Explore the high level summary below to learn more about how the new FHSA works. Learn more about contribution limits, eligibility requirements and much more.

Who can open a First Home Savings Account?

To open an FHSA, you must:

  • Be between the ages of 18 and 71
  • Be a current tax resident of Canada
  • Have not lived in a home that you or your partner owned in the current calendar year or any of the previous 4 calendar years
  • Be opening the account to save for buying a qualifying home¹ in Canada

Contributions and Deductions

  • Annual contribution limit: $8,000 (unused contributions can carry forward, with a maximum carry forward of $8,000)
  • Lifetime contribution limit: $40,000
  • Annual contributions can be deducted when you file your income tax (like an RRSP)

How can I use an FHSA?

First Home Savings Accounts can be used to invest in Stocks, ETFs, options and much more just like a TFSA or RRSP. You can also continue to contribute until you’ve reached the lifetime limit, or 15 years after the account’s initial opening.

Your investments can continue to grow tax-free within the account like an RRSP, making the FHSA an ideal choice to avoid capital gains and/or income tax on your investments while saving for a home.

Ready to buy or build your first home? The money can be withdrawn tax-free if used towards the qualifying purchase or build of your first home.

Learn more about the First Home Savings Account in this article.

FHSA vs RRSP vs TFSA

An FHSA is not a replacement for an RRSP or TFSA, but a complementary add-on.

This new account type is specifically designed for aspiring first-time home buyers. It works together with the other accounts to provide you with:

  • More contribution room
  • More tax savings
  • More opportunities for investment growth.

An FHSA takes the best features of the other accounts to give you a new and better way to save for your first home.

FHSA vs TFSA vs RRSP table

Why open an FHSA with Questrade?

You can make your money work for you. Opening an FHSA with Questrade can help make your dream of home ownership a reality.

Great for new investors

Begin trading with self-directed investing 2, or get a pre-built Questwealth Portfolio 3 that’s managed by experts.

Dual currency accounts

Hold both Canadian and U.S. dollars so you can trade on Canadian and U.S. exchanges without unnecessary currency conversion fees.

Low fee investing

With no account opening or annual maintenance fees, you’ll keep more of your money.

Learn more about why thousands of Canadians have said yes to lower fee investing by making the switch to Questrade. Join them today.

FHSA Frequently asked questions (FAQ)

Explore the section below for answers to common questions about the First Home Savings Account.

When can I open an FHSA?

To align with Government of Canada legislation, the FHSA account is available at Questrade as of April 1st, 2023.

Open an account today and start investing for your dream home purchase!

When can I begin contributing to my FHSA?

You can contribute the full year’s contribution room ($8,000) as soon as you open your account.

An additional benefit is that if you open your account in 2023 but aren’t able to contribute right away, your contribution room will still carry forward into 2024.

Essentially, this means that there’s no reason to wait to open your account, the sooner you open it the more contribution room you earn for yourself.

Does an FHSA account have an expiry date?

Yes, your FHSA account expires exactly 15 years after the day it is opened, or when the individual turns 71 (whichever comes first).

If your FHSA expires before you buy a home, the funds can be transferred into your RRSP.

Open an FHSA today

Unlock your path to homeownership with the groundbreaking Tax-Free First Home Savings Account.

Take hold of Tomorrow

Ready to open an FHSA account and take charge of your financial future? It's easy. Get started in minutes.

Open an account

1 A qualifying home would be a housing unit (generally includes a house or a condominium) located in Canada. A share in a co-operative housing corporation that entitles the taxpayer to possess, and have an equity interest in a housing unit located in Canada, would also qualify. However, a share that only provides the right to tenancy in the housing unit would not qualify.

2 Self-directed accounts are provided by Questrade Inc.

3 Questwealth Portfolios are a service provided by Questrade Wealth Management Inc.

Note: The information in this blog is for educational purposes only and should not be used or construed as financial or investment advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied, is made by Questrade, Inc., its affiliates or any other person to its accuracy.

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