First home savings account (FHSA)

Save money for your first home in Canada.

Connect with an advisor to start saving today.

Find an advisor

Last updated: May 23, 2025 | Reviewed by Paul Thorne

Dreaming of owning your first home? The First Home Savings Account (FHSA) is here to turn that dream into reality. It offers you a way to save for your down payment or other expenses related to purchasing your first home and provides valuable tax benefits.

What’s an FHSA?

An FHSA is a registered investment account that allows Canadian residents to contribute up to $40,000 (with an annual contribution limit of $8,000) to buy their first home in Canada.

Benefits

Tax-deductible contributions

Deducting your FHSA contributions may  help reduce your taxable income and overall tax.

Tax-free withdrawals

When you buy a qualifying home.

Tax-free growth

Any qualified investment growth in an FHSA is tax-free when you make a qualifying withdrawal.

Learn more about the benefits of FHSAs

Helpful numbers to know

$8,000

Annual contribution limit.

15 years or age 71

Maximum number of years you can hold an FHSA from when you open it, or until the end of the year you turn age 71.

$40,000

Maximum lifetime contribution limit.

$0

Taxes you’ll have to pay on a withdrawal to buy a qualifying home.

video thumbnail

Video: What’s an FHSA?

Watch time: 1 minute 47 seconds

In this “Simply Put” video, learn the basics of FHSAs – and how an FHSA can help you buy your first home.

What is an FHSA?

Simply put, the First Home Savings Account, or FHSA, is a new type of registered savings plan.

The FHSA allows first-time home buyers to save towards their first home, in a tax-free savings vehicle.

How does an FHSA work?

To open an FHSA, you must be a Canadian resident, be at least 18 years old and under age 71, and not have owned a home in the current or previous four calendar years.

You can contribute up to $8,000 per year to the account, up to a total of $40,000.

You can use your contributions and any investment growth for a first-home purchase.

However, if you don’t use withdrawals for a first home within 15 years, they’ll be considered taxable income.

What are the advantages of an FHSA?

The main advantage of an FHSA is that it allows first-time home buyers to save for a home purchase in a tax-efficient way.

Contributions to the FHSA are deductible for tax purposes, similar to an RRSP. And you don’t have to pay tax on either the contributions or investment earnings, as long as you don’t over-contribute. That means the money can grow faster over time.

Another key benefit is that the withdrawals you use for a first home are also tax-free, when you use them to buy a qualifying first home.

If you’re a first-time home buyer, the FHSA can make it easier for you to save for a down payment and purchase a home sooner, than if you had saved in a regular, taxable account.

For more tips and tools, visit sunlife.ca.

What’s a qualifying home?

A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed.

Types of homes that qualify include:

  • single-family homes,
  • semi-detached,
  • townhouses,
  • mobile homes,
  • condo units,
  • apartments (this includes duplexes, triplexes, fourplexes, or larger apartment buildings), and
  • a share in a co-operative housing corporation, if it entitles you to possession and gives you an equity interest in a housing unit.

Rules and eligibility requirements

Where available, you can open an FHSA so long as you’re:

  • a Canadian resident,
  • at least 18 yearsof age or older,
  • 70 years of age or younger at the beginning of the year, and
  • a first-time home buyer

Is an FHSA right for me?

An FHSA might be right for you if you:

  • Want a tax-efficient way to grow your savings to purchase your first home.
  • Are excited about the prospect of tax-free withdrawals for your home purchase.
  • Have a savings goal that aligns with the FHSA's annual and lifetime contribution limits.
  • Want the flexibility to transfer unused FHSA funds into your RRSP or RRIF without reducing your RRSP contribution limit - to help keep your options open for the future.

An FHSA might not be right for you if you:

  • Have owned a home you lived in as your principal place of residence in the current calendar year or the previous four calendar years.
  • Lived in a home as your principal place of residence that your spouse or common-law partner owned in the current calendar year or previous four calendar years.
  • Are over 71, as FHSAs must be closed by December 31st of the year you turn 71.
  • Have other pressing financial priorities that require more immediate attention.

Why open an FHSA with Sun Life

Here are a couple of benefits to opening an FHSA with Sun Life:

Range of competitive products

You have access to professionally managed investment products to suit your individual needs.

Expert support

You have access to our team of advisors to help you determine which products suit your risk tolerance, investment objectives, and lifestyle goals.

FHSA basics

Learn how FHSA contributions, withdrawals, and taxes work – plus what happens to your account if you die.

Contributions

Once you’ve opened an FHSA, you’re allowed to contribute up to a lifetime limit of $40,000, with an annual contribution limit of $8,000. Unused FHSA contribution room may be carried forward, subject to limits.

FHSA contributions

Withdrawals

To make a tax-free withdrawal (also called a qualifying withdrawal) from your FHSA, you must meet specific conditions.

FHSA withdrawals

What happens to an FHSA when you die?

If you pass away with money in your FHSA, your spouse or common-law partner who is a beneficiary may be able to transfer it tax-free to their FHSA, RRSP or RRIF. All other beneficiaries pay tax on the amount given to them.

FHSAs and estate planning

Compare the FHSA

FHSA vs HBP

What’s the difference between an FHSA and the Home Buyers’ Plan (HBP)? One doesn’t requirement repayment – one does.

Learn more about FHSA vs HBP

FHSA vs RRSP

Both offer tax advantages, but which one fits your savings goals better?

Learn more about FHSA vs RRSP

FHSA vs TFSA

They both provide the opportunity to grow your savings tax-free but are designed to meet different goals.

Learn more about FHSA vs TFSA

Frequently asked questions

Not if you’ve lived in the home in the current year or in any of the four preceding years. You wouldn’t be a first-time home buyer.

Not if you’ve lived in their home in the current year or in any of the four preceding years. You wouldn’t be a first-time home buyer.

Yes, you can open an FHSA if you own a rental property, so long as you haven’t lived in that property as your principal place of residence in the current year or in any of the four preceding years.

This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.

Whether you’re just starting out or already saving, an FHSA can help you get there. Let’s build your path to home ownership.

Enter your postal code to find an advisor near you.