Saving a home down payment in Canada’s housing market requires maximum tax efficiency. The First Home Savings Account (FHSA) launched in 2023 combines the best tax features of both the RRSP and TFSA.
Why FHSA is the #1 Account for First-Time Home Buyers
Like an RRSP, contributions to an FHSA (up to $8,000/year, $40,000 lifetime limit) reduce your taxable income. Like a TFSA, qualified withdrawals (including all investment growth and dividends) for a home purchase are **100% tax-free**.
Stacking FHSA + RRSP Home Buyers’ Plan (HBP)
Under the expanded 2024/2026 rules, a single buyer can withdraw up to **$60,000 from their RRSP** tax-free under the Home Buyers’ Plan, and combine it with **$40,000+ from their FHSA**. A couple can stack this to access over **$200,000 tax-sheltered** for their down payment!
