Overview
A First Home Savings Account (FHSA) is a registered account that allows first-time home buyers to save for a down payment on a home tax-free. That means any investment gains you earn within the account aren't taxed, and you won't pay tax on eligible withdrawals to purchase your first home.
Like RRSPs, contributions to FHSAs are tax deductible. This means that you can deduct contributions you make to the account from your total taxable income for that year. Learn more about FHSAs and all that they offer.
Eligibility requirements
To be eligible to open an FHSA, you must meet the following requirements:
- Be a resident of Canada
- Be at least 18 years old, but no older than 71 years
- Be a first-time home buyer, as defined by the CRA
Contribution limits and withdrawals
- Contribution limit: The annual contribution limit is $8,000.
- Carry forward limit: You can carry forward up to $8,000 of unused contribution room to use the following year (subject to the lifetime FHSA limit).
- Lifetime limit: You can contribute a maximum of $40,000 across all of your FHSAs.
Types of FHSAs on Wealthsimple
You can open managed and self-directed investing FHSAs on Wealthsimple:
- You can open as many managed FHSAs as you like.
- You can have one self-directed FHSA.
How to open an FHSA
Follow the steps below to open an FHSA with Wealthsimple:
- Sign in to your Wealthsimple mobile app
- Tap the Home tab at the bottom of your screen
- Scroll past your accounts and tap + Add an account
- Choose Open a new account
- Select FHSA from the options
- Follow the prompts to open your FHSA
Note: Only self-directed investing FHSAs are available to open on the web experience of Wealthsimple. To open a managed FHSA, follow the mobile app steps.
- Log in to your Wealthsimple account
- Select + Add an account from the Home page
- Select the Investing tab
- Choose FHSA
- Choose how you'll use the account (Managed portfolios or Self-directed investing)
- Select Next
- Follow the prompts to open your FHSA
The difference between an FHSA and an RRSP
Refer to the table below to understand some differences between an FHSA and an RRSP:
| FHSA | RRSP | |
| Helps you safe for | Your first home | Retirement |
| Eligibility | First-time home buyers | 18-71 years old |
| Annual contribution limit | $8,000 (up to a maximum of $40,000) | 18% of previous year's income up to $32,490 (for 2025) |
| Tax impact on contributions | Deducted from taxable income | Deducted from taxable income |
| Tax impact on withdrawals | Growth and withdrawals towards your first home are tax-free | Taxed as income (with some exceptions) |
| Contribution deadline | December 31 | 60 days after December 31 |
| Government benefits | No impact on other benefits | Withdrawals may impact other government benefits based on income |
| Withdrawal stipulations | None | Must withdraw to RIF at 71 |
Frequently asked questions
How can I be sure that I’m eligible to open an FHSA?
To see if you’re eligible to open an FHSA, refer to the CRA’s article on Opening an FHSA.
Can I open a joint FHSA?
No. Since the CRA calculates contribution room on a per-person basis, they don't allow joint FHSAs.
I’m a US/Canada dual citizen. Can I open an FHSA?
Many tax experts would advise U.S. citizens to avoid investing in an FHSA because it is not considered a tax-sheltered account by the IRS. If you invest using a FHSA as a U.S. citizen, you won’t get to enjoy the tax-free benefits because all your investment gains will remain taxable when you file taxes in the U.S.
In addition, you may have additional filing costs when reporting your FHSA and any associated income.
Can I convert another account into an FHSA?
No, converting accounts is not possible. If you wish to move funds from another account to an FHSA, you may be able to set up an internal transfer. If you are withdrawing funds from a registered account to transfer into your FHSA, there may be tax implications.
Why am I being charged a “non-resident withholding tax” in my FHSA?
Although the tax-free status of the FHSA is recognized in Canada, the US Government doesn't officially recognize it, so US-company dividends received in your FHSA are subject to a 15% withholding tax. Don't worry, we take care of those for you so there's no effort needed on your end or any paperwork to file with the IRS.
When do I have to close an FHSA?
There are three different times where you would need to close your FHSA:
- On the 15th anniversary of opening your first FHSA
- On the year that you turn 71 years of age
- On the year after your first qualifying withdrawal from your FHSA
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