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Everything you need to know about the new FHSA

Posted on Friday September 23, 2022

Everything you need to know about the new FHSA


Have you heard about the FHSA? Dreaming of buying your first home? You’ll definitely want to get acquainted with this new financial product.

A new tool to help make your home ownership dream come true

The FHSA, or tax-free first home savings account, is a new registered plan.

What is the FHSA?

It’s a hybrid between the RRSP and the TFSA. Like in an RRSP, FHSA contributions are tax deductible and the income earned grows tax-free. And like in a TFSA, withdrawals from the FHSA are not taxable.

The main benefit of the FHSA over the Home Buyers’ Plan (HBP) is that you don't have to repay the funds you withdraw from the FHSA. 





What is it?


Registered retirement savings plan

Tax-free savings account

Tax-free savings account for buying your first home

What is it used for?


Saving for retirement/registered retirement income fund (RRIF)


Saving for a home/Home Buyers’ Plan (HBP)


Saving for education/lifelong learning plan (LLP)

Complementary strategy/retirement, buying a first home, going back to school, sabbatical or maternity/paternity leave, travel, renovations or emergency fund

Buying a first home

Contributions deductible from taxable income?


Yes, up to the limit


Yes, up to the annual and lifetime limit

Withdrawals taxable?



* except HBP or LLP withdrawals




* unless the funds are used for something other than buying a home

*Depending on the type of investments held

How withdrawals affect contribution room


Annual contribution room limit must be respected

Withdrawals will be added to next year’s contribution limit

Withdrawals cannot be put toward future contribution room

Who is eligible?

  • Canadian residents
  • People age 19 or older
  • People not living in a principal residence they owned in the previous four calendar years
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What are the rules on contributions?

There are also a few things to keep in mind regarding contributions.


Lifetime contribution limit


Annual contribution limit


Contributions carried forward to the following year

Maximum $8,000

Can you have multiple FHSAs?


*Provided your total contributions do not exceed the annual and lifetime contribution limits

Eligible withdrawal for first home


*Taxable if withdrawal is not eligible

Transfer from RRSP to FHSA


*Subject to annual and lifetime limits

End of plan

15 years after opening; or

When you turn 71; or

The year following your first eligible withdrawal

Unused amounts must be transferred to an RRSP or RRIF or withdrawals will be taxable

Can you contribute via direct deposit?



Talking to an advisor pays off!

Talk to a wealth management advisor today about your homebuying plans. We’re here for you!


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With the experts in your corner, you’ll have the peace of mind you need to start looking for your dream house and purchase your first home!

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What to anticipate when buying your first house
First-time home buying: Programs to help make your dream a reality
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