Tax-Free First Home Savings Account (FHSA)

What is a First Home Savings Account (FHSA)?

An FHSA combines some of the features of a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). Like an RRSP, contributions will generally be tax-deductible. Similar to TFSA withdrawals, when a qualifying withdrawal is made to purchase a qualifying home, the amount withdrawn, including any income or gain, is not-taxable1.

The First Home Savings Account will be available at TD in Summer 2023

Ready to help you save for your first home

  • Make home ownership a goal 

    Using TD Goal Builder, an advisor can help define an investing goal so you can move towards home ownership with confidence. 

  • 100-day TD Special Offer Cashable GIC at 4%7

    Make your savings work for you, TD offers a range of investing options, including a 100-Day TD Special Offer Cashable GIC with a 4%7 per annum interest rate. 

  • Start planning for your mortgage 

    What size down payment and mortgage will you be comfortable with? Use our Mortgage Affordability Calculator to find out.  

  • Get notified when the FHSA is available 

    Sign up to be among the first to know when the FHSA is available at TD Canada Trust Branches and learn about our offer(s). 

Want to talk about saving for your first home?

An advisor is ready when you are.   

Book an appointment with an advisor, in person or online, at your convenience.

Get notified as soon as the FHSA is available at TD Canada Trust branches and to learn about our offer(s).

To be eligible to open an FHSA you must be:

  1. A Canadian resident

  2. 18 years or older2 and

  3. A first-time home buyer. An individual is considered to be a first-time home buyer if at any time in the part of the calendar year before the account is opened or at any time in the preceding four years they did not live in a qualifying home.

Type of Investments an FHSA can hold

  1. You can hold the same types of investments in a FHSA as in a TFSA or RRSPs, including cash, mutual funds, publicly traded securities, government and corporate bonds, and guaranteed investment certificates.

  1. The account can stay open for a maximum 15 years4 or until the end of the year you turn 71, or the end of the year following the year in which you make a qualifying withdrawal from an FHSA for the first home purchase, whichever comes first.

Contributions and Deductions:

  • Annual contributions are capped at $8,000 up to a $40,000 lifetime contribution limit.
  • Individuals may claim an income tax deduction for FHSA contributions made in the calendar year or in a previous year, to the extent not previously deducted. 
  • A maximum of $8,000 unused contribution room can carry forward to the following year. 

What if you don't purchase a home?

  1. Funds withdrawn from your FHSA that are not used to purchase a qualifying home are subject to tax5 .

  2. Alternatively, the balance in your FHSA not used to purchase a qualifying home could be transferred to an RRSP or RRIF (Registered Retirement Income Fund) on a non-taxable transfer basis, subject to applicable rules4.

  1. Transfers from your FHSA to your RRSP or RRIF do not impact your available RRSP contribution room. 

  2. The funds transferred to an RRSP or RRIF will be taxed upon withdrawal.

What is a qualifying withdrawal?

  1. You must be a first-time homebuyer and a resident of Canada at the time of the withdrawal for the acquisition of your qualifying home.

  2. A "qualifying home" is defined as a housing unit located in Canada. It also includes a share of the capital stock of a cooperative housing corporation, where the holder of the share is entitled to possession of a housing unit located in Canada

  1. You must have a written agreement to buy or build a qualifying home located in Canada before October 1 of the year following the year of withdrawal,

  2. You must also intend to occupy the qualifying home as your principal place of residence within one year of buying or building it.

Can I transfer funds from my RRSP to an FHSA?

  • You can transfer funds from your RRSP to your FHSA on a tax-free basis. These transfers are subject to FHSA annual and lifetime contribution limits. Such transfers are not deductible from income
  • Transfers from an RRSP to an FHSA do not restore your RRSP contribution room.
  • In-kind transfers will not be available for the FHSA at this time

How is the FHSA different from the Home Buyers Plan?

With the current Home Buyers' Plan, Canadians can withdraw up to $35,000 from their RRSP subject to eligibility and conditions, then pay back the funds to their RRSP over 15 years.

Unlike the Home Buyers’ Plan, with an FHSA the funds do not need to be paid back. Our advisors are here to guide you on which investment option, or combination of options, will help you reach your home ownership goals.

Jamal – 28 years old, marketing associate
Jamal wants to buy his first home and has great budgeting and saving skills. But he's also concerned he might change his mind and want to invest his money elsewhere.

Why an FHSA?
If Jamal thinks he’ll buy his first home within the next 15 years, the FHSA might be an excellent option. He can take advantage of income tax deductions as well as investing and growing his money, tax-free.

If Jamal does change his mind he can transfer the money saved in his FHSA to an RRSP. Once withdrawn from the RRSP, however, funds would be subject to taxes.

Suzanne – 31 years old, Teacher

Suzanne has always wanted to purchase her own condo. She already started investing in her RRSP, which she can use as part of the HBP withdrawal. However, she is not sure how FHSA works with the RRSP HBP.

Combining FHSA and HBP

HBP5,6 allows a first-time home buyer to withdraw up to $35,000 from their RRSP to purchase a qualifying home without having to pay tax on the withdrawal provided that this amount is repaid over 15 years. The HBP continues to be available under existing rules. Thus, Suzanne can make both an FHSA withdrawal and an RRSP HBP withdrawal for the same qualifying home purchase. 

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