The Ultimate Guide to Maximizing Your FHSA

A recent RBC poll¹ finds that 67 per cent of Canadians have always pictured themselves buying a home, up five percentage points from 2025. In fact, about one-third expect to purchase a house or condo within the next two years. And Canadians have a tax-advantaged way to earmark funds to help with those major purchases: the First Home Savings Account (FHSA).

At first glance, the FHSA is fairly straightforward: you get $8,000 in contribution room in the year you open your account, plus another $8,000 each year after that, up to a lifetime limit of $40,000. You can also carry forward up to $8,000 of unused contribution room, potentially allowing you to contribute up to $16,000 in a later year, subject to your remaining lifetime limit.

Like with contributions to a Registered Retirement Savings Plan (RRSP), contributions to an FHSA are tax-deductible. And like with a Tax-Free Savings Account (TFSA), investment growth inside an FHSA is generally tax-free, and qualifying withdrawals to buy or build a home in Canada aren’t taxed.

Not surprisingly, the FHSA is popular: Within 18 months of the FHSA launching on April 1, 2023, nearly one million Canadians had opened one, according to the federal government.² In 2025, 1,938,070 Canadians had at least one FHSA open.³ At the end of that year, the total value of active accounts was approximately $13.77 billion, and the average balance for active FHSA holders was $10,000.

The features mentioned above alone would make the FHSA a useful savings and investment vehicle, but there’s even more you can do with the account. Here are six options you should know.

1. Think about timing

Since opening your first FHSA starts a 15-year clock, timing matters. If you don’t expect to buy a home within that period, you may want to hold off. On the other hand, opening an FHSA as soon as you’re eligible – at 18 or 19, depending on your province or territory – allows you to start accumulating contribution room, even if you don’t put money in right away. Of course, opening an FHSA earlier can give your investments more time to grow and compound – and that could be valuable even if you’re only able to contribute small amounts. So, give some thought to when you might buy a home and how much you can contribute each year.

2. Reinvest your FHSA refund

Since contributing to an FHSA can reduce your taxable income and potentially result in a refund, you might think about putting that refund back into your FHSA, provided you have contribution room available. This is one way to build your savings without having to use more money from your paycheque. If you no longer have FHSA room, you could consider directing the refund into available space in either a TFSA or an RRSP.

3. Delay claiming your deduction

Sure, money you put into an FHSA is tax-deductible, but you don’t have to claim the deduction in the same year you make the contribution. Instead, you could consider carrying all or part of it, forward to a future year when your income, and potentially the value of that deduction, might be higher.⁴ If you choose to carry a deduction forward, remember to claim it in a future year, and if you went with a partial deduction, be sure to keep track of the amount you can claim in the future.

Why does that matter? A deduction reduces your taxable income by the amount you claim. If you claim it when you’re in a higher tax bracket, the deduction could generate greater tax savings than when you’re in a lower bracket. Delaying a deduction might be especially useful if you’re a student or you just got your first job and expect your earnings to rise. However, it could be helpful to weigh the potential future benefit against getting the tax savings sooner and putting it to work right away.

4. Don’t forget about the Home Buyers’ Plan!

With more people using the FHSA, you might have forgotten about the RRSP Home Buyers’ Plan (HBP), which allows you to withdraw up to $60,000 from your RRSP to put toward a first home purchase.⁴ The HBP is another way to put your RRSP savings towards a home without paying tax on the withdrawal, though you’ll need to repay the money over the next 15 years (or pay tax on any missed repayments). The real advantage comes, however, when you use the HBP and the FHSA together. The combo allows you access up to $100,000 per eligible home buyer: $60,000 from your RRSP under the HBP and $40,000 (plus any growth) from the FHSA. If you’re buying a qualifying home with someone else, you can potentially tap into a combined $200,000, plus any growth that has accumulated in your FHSAs.

5. Repurpose your RRSP savings

Just as you can move money from your FHSA to your RRSP, you can transfer funds or investments directly from your RRSP to your FHSA without incurring a tax hit, provided you have enough FHSA contribution room.⁶ However, you can’t claim a tax deduction for the amount you transfer, and the transfer uses up FHSA contribution room without restoring your RRSP contribution room.

Even so, this strategy can be helpful if you want to use existing RRSP savings for your first home without taking on the repayment requirements of the HBP, or if you want to add to your home-buying fund without relying entirely on money from your paycheque. Just consider how this move could affect your retirement savings in the long run.

6. Transfer unused FHSA money into your RRSP

While the FHSA is designed to help you save for your first home, sometimes plans change. If you don’t use the money in your account to buy a home, your account must be closed by December 31 of the year in which the earliest of three events occurs: the 15th anniversary of opening your first FHSA, your 71st birthday or the year following your first qualifying withdrawal.

If you have unused savings in your account, whether or not you’ve made a qualifying withdrawal, you can generally transfer it directly into your RRSP or RRIF without immediate tax consequences and without using any existing RRSP contribution room.⁷ There are, however, some trade-offs to keep in mind. A bigger RRSP could eventually mean larger RRIF withdrawals, which could increase your income enough to trigger an Old Age Security (OAS) clawback. You’ll also have to pay tax on the money when you withdraw it from your RRSP or RRIF. Ideally, you’ll do that in retirement, when you’re likely to be in a lower tax bracket.

Your other option is to withdraw the money from your FHSA. In this scenario, the withdrawal would be included in your taxable income for that year.

Bonus tip: Did you know that past homeowners can still qualify for the FHSA?⁸ But there’s a catch: you must not have lived in a qualifying home as your principal place of residence that you owned or jointly owned, in the current or previous four calendar years. And, in addition to being a resident of Canada, one of the following must also be true:

• You did not live in a qualifying home owned or jointly owned by your spouse or common-law partner within that same time period.
• You don’t have a spouse or common-law partner at the time you open your new FHSA.

Ultimately, whether those tactics make sense for you will depend on your personal situation and financial goals. Before you start saving, take the time to consider your options and determine what’s right for you.