How does the Canadian FHSA work?

The First Home Savings Account (FHSA) allows first-time Canadian homebuyers to contribute up to $8,000 per year ($40,000 lifetime limit). Contributions are tax-deductible (reducing your taxable income like an RRSP), and withdrawals to buy a qualifying first home are 100% tax-free (like a TFSA).

Can a couple combine their FHSA accounts to buy a home?

Yes! Both partners can open individual FHSA accounts. Together, a couple can contribute up to $16,000 per year, accumulating an $80,000 tax-free principal down payment (plus compound investment growth) toward their first home.

What happens if I don't buy a home within 15 years?

If you do not purchase a qualifying home within 15 years (or by age 71), you can roll over your entire FHSA balance directly into an RRSP or RRIF on a tax-free, penalty-free basis without using any of your existing RRSP contribution room.

Official CRA Rules • Up to $80k Couple Cap

First Home Savings Account (FHSA) Calculator

Model your home down payment growth with tax-deductible contributions, tax-free compound growth, and annual CRA tax refunds.

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🌱 Contribution & Tax Parameters

CRA Qualified

Account Ownership

Annual Contribution ($ CAD) $8,000 / year

CRA statutory limit: Maximum $8,000 per person per calendar year.

Years Until Purchase

Years

Max 15 years participation window

Expected Return (%)

Index ETF / HISA / GIC yield

Your Marginal Tax Rate (%) 35.0% Combined (Fed + Prov)

Determines the size of your annual CRA tax refund.

Reinvest CRA Tax Refund into Savings Adds your annual tax refund ($2,800/yr) into your home down payment fund.

Accumulated Down Payment Year 5 Horizon

$61,650

100% Tax-Free Qualified Withdrawal

CRA Tax Refunds $14,000

Tax-Free Growth $7,650

FHSA Super-Advantage vs. Regular Account

Total Contributions Made: $40,000 (Lifetime Cap)

Cumulative Tax Refunds: +$14,000

Investment Growth Earned: +$7,650

Total Down Payment Wealth: $61,650

💡 Pro-Strategy: Combine FHSA + RRSP HBP

You can combine your FHSA with the RRSP Home Buyers' Plan (HBP limit: $60,000)! A couple can unlock up to $80,000 (FHSA) + $120,000 (RRSP HBP) = $200,000 in combined tax-sheltered capital.

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Down Payment Trajectory

Cumulative Contributions vs. Total Balance with Tax Refunds & Compounding

Total Fund Base Deposits

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How the Canadian First Home Savings Account (FHSA) Works

Launched by the Canadian Federal Government, the FHSA combines the best features of both an RRSP and a TFSA specifically tailored to help prospective buyers accumulate a home down payment.

1. Contribution Caps & Lifetime Limits

Every eligible Canadian resident aged 18 to 71 can contribute up to $8,000 per year towards a lifetime ceiling of $40,000. Unlike the TFSA, contribution room only starts accumulating in the year you open your first FHSA account.

2. Tax Deduction & Qualified Home Withdrawal

Contributions directly lower your net taxable income on line 20805 of your T1 return. When purchasing a qualifying first home, you withdraw the entire accumulated amount (including all capital growth) completely tax-free. Unlike the RRSP HBP, you never have to pay it back.

Frequently Asked Questions (FHSA)

Can I carry forward unused FHSA contribution room? ▼

Yes, you can carry forward up to $8,000 of unused room to the following year. This means the maximum contribution allowed in any single calendar year is $16,000 ($8,000 current year + $8,000 carried forward).

What qualifies as a "First-Time Homebuyer"? ▼

You are considered a first-time homebuyer if you or your spouse/common-law partner did not own a qualifying home that was your principal place of residence in the calendar year the account is opened or in any of the preceding 4 calendar years.

FreeCalcSuite • Canadian FHSA Growth & Tax Benefit Statement