How the FHSA Can Help You Save for Your First Home

Buying your first home can feel like a huge financial mountain to climb, but Canada’s new First Home Savings Account (FHSA) is making it easier than ever to reach that goal. Whether you’re already saving or just starting out, understanding how to use this account properly could save you thousands in taxes and accelerate your path to homeownership.

💡 What Exactly Is the FHSA?

The FHSA is a tax-advantaged account designed specifically to help first-time home buyers save for a down payment. It combines the best parts of an RRSP and a TFSA:

  • Contributions are tax-deductible (like an RRSP) meaning you can lower your taxable income.

  • Withdrawals for your first home are tax-free (like a TFSA).

So, you save on taxes going in and coming out, making it one of the most powerful tools for anyone planning to buy their first property.

💰 How Much Can You Contribute?

  • You can contribute up to $8,000 per year.

  • The lifetime maximum is $40,000.

  • Unused room carries forward (up to $8,000 per year).

If both you and your partner qualify, you can each open your own FHSA, meaning you could combine for up to $80,000 tax-free toward your future home.

📈 How the Money Can Grow

Inside your FHSA, you can hold:

  • Cash

  • GICs

  • Mutual funds

  • ETFs

  • Stocks

Any growth is completely tax-free, as long as the funds are used for a qualifying home purchase. That means your investment returns can compound faster, every dollar you earn goes straight toward your future down payment.

🔄 FHSA vs TFSA vs RRSP: How They Work Together

Here’s how you can use these accounts strategically:

  • FHSA: Ideal for first-time buyers, short- to medium-term savings with the best tax perks.

  • TFSA: Great for flexibility; withdrawals can be used for the wedding, furniture, or extra closing costs.

  • RRSP (Home Buyers’ Plan): You can still withdraw up to $35,000 tax-free to buy your first home, and yes, you can combine this with the FHSA.

By stacking these together, you could access well over $100,000 tax-advantaged dollars toward your purchase.

🏠 Pro Tip: Open It Early

Even if you’re not buying for a few years, it’s smart to open your FHSA now, your contribution room begins accumulating once the account is open, not when you first deposit. By getting it set up early, you’re giving yourself a head start on both tax savings and investment growth. Even small, consistent contributions can compound over time and make a real difference when you’re ready to buy..

✉️ Final Thoughts

The FHSA is one of the biggest game-changers for new buyers in Canada, especially in Calgary, where affordability is still within reach compared to other major cities.

If you’re planning your first purchase and want help building a smart savings strategy or understanding how to combine your FHSA, TFSA, and RRSP, I’d be happy to walk you through it.

👉 Contact Me to learn how to get started and start turning your savings into your first set of keys.