architectes hypothécaires

The FHSA: The First-Time Buyer’s Best Friend

celiapp programme financier pour achat première maison

There are already so many programs with acronyms in the financial world; RRSP, TFSA, RESP… Nevertheless, you’ll want to learn about a brand new one coming very soon: the FHSA.

This new type of bank account is excellent for first-time homebuyers. Although the official launch date has not yet been announced, the federal government has informed citizens that the program will be available in 2023.

What is the FHSA?

I can already hear you saying, “What’s the point of all this?”, “Am I eligible?”, ” Is it complicated? Don’t get ahead of yourself… I’m getting there!

But first, what does FHSA even mean?

FHSA stands for: Tax-Free First Home Savings Account. It means exactly what it implies. Basically, it’s a TFSA, with some of the benefits of an RRSP, created specifically for the purchase of a home.

In numbers


You can contribute a maximum of $8,000 per year to the FHSA.

$40 000

In total, you can put up to $40,000 into this account for the purchase of your first property. Do the math; that takes just 5 years if you put in the annual maximum.

18 years

There are only two eligibility requirements; you must be at least 18 years of age to qualify for this account, and you must not have been a homeowner for the previous 4 years.

Benefits of the FHSA

So why use the HFSA instead of the RRSP, TFSA or the HBP – the federal government’s Home Buyers’ Plan? 

First of all, because the arrival of the HFSA likely means the end of the HBP will be seen in a few years. And besides, you wouldn’t be able to combine the two for the purchase of a first property.

Secondly, because this new program is far superior to others available and much more advantageous. 

Unlike the HBP, which was introduced in Canada in the 1990s, you do not have to pay back any amounts with the HFSA. And, like with RRSPs, you don’t have to pay taxes or penalties when you make a withdrawal.

Like a TFSA, your contributions are tax deductible and withdrawals are tax-free as long as the money in the account is used to purchase property. If it is used for any other purpose, you will be penalized.

In addition, unused HFSA contributions can be carried forward to the following year.

However, you will have a maximum of 15 years to use your account, after which you will be required to close it. But don’t worry, you can then transfer everything to your RRSP.

It is worth mentioning that you will have 12 months to close your account after the withdrawal, and you will not be allowed to open a second one, even if you have not become a homeowner.

So what's best for you?

In short, the FHSA is a great opportunity if you’re looking to purchase your first home or condo.

But remember! This tool does not allow you to have more money in your pocket, it allows you to lose less money in taxes.

Looking to buy your first property?

The FHSP program is a great way to save for a down payment, but if you want to buy your first home or condo, you also need to get pre-approved for a mortgage, which you can do with an expert like Nicolas Ouimet.


Share this article on your social media platforms.