How to Get Into The Housing Market as a First-Time Home Buyer

First Time Home Savings Account (FHSA) A Gift for a Lifetime that Creates a Tax Savings

This article is for those looking to buy their first home and a person looking to help someone, usually a family member, get into the housing market. 

In addition to the Home Buyers’ Plan (HPB) via RRSP contributions, the Canadian government introduced the First-Time Home Savings Account (FHSA). This unique savings account comes with a range of benefits, making it an attractive option for those looking to enter the real estate market. This article explores the advantages of the First-Time Home Savings Account in Canada. 

Tax Benefits

One of the most significant advantages is income tax savings. Contributions to the FHSA are tax-deductible, meaning that the money you deposit into the account reduces your taxable income for the year. Please read on for details.

Additionally, interest earned on the savings within the FHSA is tax-free. This tax-free growth can significantly boost your savings over time, helping you reach your homeownership goal faster.

High Contribution Limits

Per the Govt. of Canada (1), the annual contribution limit is $8,000(2), with a $40,000 lifetime limit. Coupled with RRSP contributions, there can be up to $75,000 of tax-advantaged down payment funds per person. 

In BC, the marginal tax rate for a $60,000 income is just over 28% (3). An $8,000 contribution into a FHSA account creates a $2,256 income tax savings. You can really make traction if the income tax savings are invested into the following year’s FHSA or RRSP contribution, saving more income tax. 

No Age Limit

Unlike some homebuyer programs, the FHSA has no age limit, allowing individuals of all ages to open an account and save for their first home. Whether you’re a recent graduate or a lifelong renter, the FHSA can be a valuable tool to help you achieve your homeownership goal.


The FHSA offers flexibility in terms of how you can use the funds. While the account is designed to help first-time homebuyers save for a down payment, the money can be used for other purposes if necessary. For example, if you decide not to buy a home, you can transfer the funds to your Registered Retirement Savings Plan (RRSP) without penalty. This flexibility ensures that your hard-earned savings are put to good use, whether it’s for a home or retirement.

No Income Restrictions

Unlike some other government-sponsored homebuyer programs, there are no income restrictions for the FHSA. This means that individuals with varying income levels can take advantage of the tax benefits and high contribution limits, making it an inclusive option for those who aspire to own their first home.

Easy Access

The FHSA is widely accessible through most financial institutions in Canada. An account can be opened via a bank, credit union, or investment firm making it convenient for individuals across the country to start saving for their first home.

Family Plan

For someone looking to help a family member with a gifted down payment, this is a great way to compound your gift and make a more meaningful impact. Multiple family members can contribute to a single account, helping first-time homebuyers reach their down payment goals more quickly. Contributing family members do not need to be first-time homebuyers themselves.


The First-Time Home Savings Account is a great tool for entering the housing market. With its tax benefits, high contribution limits, flexibility, and accessibility, it offers a well-rounded solution for first-time homebuyers. While this article is based on current guidelines, checking the most up-to-date rules and regulations before opening a FHSA account is important. Overall, the FHSA can be a powerful resource in helping Canadians achieve their dream of homeownership while enjoying financial advantages.

Email your questions, or click here to book an appointment.

  2. Contribution limits are cumulative. If, for example, $3,000 is put in year one, $11,000 can be put in year two. Click Here for guidelines. 

“It’s about the client, not the paycheque.”

—Dan Oliver, Founder

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