Don’t Miss Out on FHSA Benefits
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18/09/2025
Book a free consultation with Wiseconomy today and discover how the First Home Savings Account can accelerate your path to homeownership.
Schedule a Meeting!Buying your first house in Canada is not easy, especially in 2025, when the prices are at a record high. Every dollar counts when there are rising property prices and strict mortgage rules. However, that is where the First Home Savings Account (FHSA) can play a major role. FHSA is designed to help first-time homebuyers, providing both tax relief and a growth opportunity. If you are planning to buy a home for the first time in Canada, the first home buyers savings account deserves your attention.
In this guide, we’ll walk you through everything you need to know about FHSA in 2025 and how it can help you achieve homeownership faster.
You can consider the first home buyers savings account as a tool for tackling the growing challenge of housing affordability in Canada. The Canadian government introduced it in 2023 to help first-time buyers build their down payment in a tax-efficient way.
The contribution room in the first home buyers savings account is $8,000 annually and is capped at $40,000 lifetime. With this, savers have the opportunity to lower their taxable income today and withdraw their savings tax-free later when purchasing a home.
Moreover, the account can also hold investments like mutual funds, ETFs, or GICs, so that your savings are not sitting idle but can grow too while staying sheltered from tax. Hence, these advantages that FHSA offers as a tax-free home savings account are the reasons it has become a popular choice.
It was evident that the home prices in Canada were rising at an unprecedented pace, while the wages were not growing in proportion. Because of this situation, the dream of home ownership has been slipping away out of reach for many young Canadians.
The first home savings account, launched in 2023, was the required solution to address these challenges. With this, you can save by getting tax relief today and have tax-free access to your savings later.
Therefore, it helps bridge the affordability gap and helps more Canadians to achieve the milestone of owning their first home.
If you want to open a first home buyer savings account, you must meet certain eligibility criteria, that is:
If you meet these conditions, you can open and contribute to an FHSA with most financial institutions.
Talk to Wiseconomy today & we’ll help you maximize tax savings and build the right strategy for your first home purchase.
Schedule A Meeting
Don’t Miss Out on FHSA Benefits
One of the biggest advantages that makes a first home buyers savings account an attractive option is its tax benefits. How does that happen?
First, the contributions are tax-deductible, reducing your taxable income for the year. Second, when you are buying or building your qualifying first home, all withdrawals, including contributions and investment growth, are tax-free.
Not just contributions and withdrawals, but any earnings generated within the account, including interest, dividends, and even capital gains, are not taxed while they stay in the plan. Therefore, this makes FHSA an attractive tax-free first home savings account.
The withdrawals and home purchase rules when it comes to FHSA are simple. You can use the funds to buy or build a qualifying home, and it is completely tax-free.
To qualify, the home must be in Canada, and you must plan to live in it within a year. In addition, there is no repayment required, which is a major relief for most buyers. However, you have to understand that any withdrawals for non-home purposes are fully taxable as regular income.
Also, there are instances where your plans change and you do not purchase a home. In that case, your savings are not lost. You can move your savings into the Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) without any penalty.
With these features, FHSA establishes itself as a low-risk, flexible tool for homebuyers. However, before you invest, it is advisable to consult a professional and clear all your doubts. Wiseconomy is your reliable platform to help you make informed financial decisions.
Therefore, if you are planning to buy your first home, considering FHSA should definitely be on your list. It allows you to save efficiently and get tax reductions, helping make your first home in Canada a reality.
At Wiseconomy, we are here to guide your journey through FHSA and other financial tools available so that you can make the right financial decisions with confidence.
Founder, Wiseconomy
Certified LLQP professional with years of experience helping individuals navigate Canada’s financial landscape, select bespoke insurance coverage, and create personalized investment strategies tailored to their unique goals, needs, and long-term financial well-being.
Explore frequently asked questions for quick help, common topics, and essential information.
The annual contribution one can make to an FHSA is $8,000, and the lifetime cap is set to $40,000.
Unlike TFSAs and RRSPs, the FHSA offers you dual benefits. Like RRSP, the contributions are tax-deductible, and the withdrawals are tax-free, like a TFSA. Therefore, this dual advantage is what makes FHSA different.
Yes. You can use both the FHSA and the HBP together. Here, you can withdraw under HBP from your RRSP and still use your FHSA savings.
You should not worry about your FHSA savings going to waste if you do not purchase a home. You can choose to transfer your funds to your RRSP or RRIF account without tax penalties. But keep in consideration that non-home withdrawals are taxable.
You should understand that FHSA is not just a savings account but can also hold investments like mutual funds, ETFs, stocks, GICs, and bonds. This flexibility ensures that your contributions are not just sitting idle but are also growing tax-free over time.
