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Personal PlanningDiscover the FHSA Advantage: Your Kids and Grandkids’ Pathway to Homeownership


This article was reviewed by Jay Brecknell, CFP®.

Have you found yourself worried about whether or not your kids (or grandkids) will ever be able to own their own home? We get it, it’s a common concern at the moment, given the economic climate and the real estate crisis we’re currently facing in British Columbia and across Canada.

It’s true that homeownership costs have eased since BC’s record peak in 2022, but costs remain high and recent reports are showing a surge in housing expenses, leaving many would-be first-time buyers feeling uneasy. With rising housing costs in 2024 (values increasing by 0.6 percent) and higher mortgage rates, homeownership is becoming increasingly challenging.

So, what can you do to help the people in your life realize their dreams of homeownership? You can open doors and help your kids or grandkids buy a home when they’re ready to buy, or you can educate them before it’s time to buy about ways to save and help them if it’s in your means to do so—and we have a great tip for you.

Last year, the Government of Canada launched the First Home Savings Account (FHSA), and this little-known savings account is here to reduce barriers to entry and help first-time buyers get into the housing market. If you have someone in your life who could benefit from this opportunity and are seeking ways to support their entry into the market, read on:


  • What is an FHSA 
  • Who qualifies
  • Contribution limits 
  • Tax deductions for FHSA contributions
  • Using an RRSP and FHSA
  • Closing an FHSA

What is an FHSA?

Simply put, an FHSA is a registered plan allowing prospective first-time home buyers to save for their first home. But if you dig a little deeper, you’ll find it’s the key to financial flexibility on the journey to homeownership.

Picture this: a savings plan designed to empower first-time buyers, offering up to $40,000 in tax-free savings ($8,000 contributed annually) toward your dream home. Just like a Registered Retirement Savings Plan (RRSP), contributions are tax-deductible.

While it may seem straightforward to stash away $8,000 annually for five years, the real benefit begins when you kickstart your contributions. The clock starts ticking when you put your money in and you can’t accelerate it, so the important thing is to start. And always remember; you can’t create room for growth until you actually invest.

Who can open an FHSA?

If you’re in the know, skip ahead, but for those of you who aren’t, you have to meet the following criteria to open an FHSA:

If you haven’t owned a home for four years, you can requalify for the first-time home savings account. Many people overlook this, so it’s valuable information to keep in mind. For a deep dive into eligibility and qualification information, check out more here.

Tax deductions for FHSA contributions

Once you get the ball rolling, savings grow tax-sheltered. Every dollar invested is tax-deductible, just like an RRSP. And the best part? You don’t have to use the deduction right away; you just have to claim the amount. You can hold off until you’re in a higher tax bracket to maximize your benefit.

You can think of it this way: all contributions are tax-deductible, just like an RRSP, and your qualifying withdrawals are non-taxable just like a TFSA.

Can you use your RRSP and FHSA?

When the time comes to make that first-time home purchase, it can be withdrawn from your FHSA tax-free AND you can tap into your RRSP through the Home Buyers’ Plan. Yes, that’s right—both can be used to save and used to buy a home.

Carry-forward contributions

Remember, starting is the most important thing. If you can only contribute $500.00 out of the $8,000.00 annual limit, do it—maybe next year you can contribute more. If this sounds like you, you’re going to want to pay attention to carry-forward contributions. 

You are allowed to carry forward your unused annual contribution limit up to a maximum of $8,000. This means that if you contribute less than $8,000 in a given year, you can contribute the unused amount in a subsequent year on top of your annual contribution limit of $8,000 (subject to your lifetime contribution limit). 

For example, if you contribute $5,000 to your FHSA in 2024, you’ll be allowed to contribute $11,000 in 2025 (i.e., $8,000 for 2025, plus the remaining $3,000 from 2024).

Carry-forward amounts only start accumulating after you open an FHSA for the first time. As such, if you’re a first-time home buyer, you could consider opening an FHSA immediately, even if you don’t have the funds to contribute. As an example, if you open an account in 2024 but only have the funds to contribute to the FHSA in 2025, you’d be able to contribute up to $16,000 ($8,000 annual contribution room from 2025, plus $8,000 carried forward contribution room from 2024) in 2025.

The fine print

You have to use your FHSA contributions within 15 years of opening the account, or by the time you turn 71 years old, whichever comes first. If you don’t, you can transfer savings into an RRSP or RRIF or make a taxable withdrawal.


First-time home buyers need to take advantage of every opportunity available to them in order to break into the housing market. Understanding, opening, and contributing to an FHSA could make all the difference on the path towards homeownership, and sharing this knowledge with your kids or grandkids could help them on their way.

To maximize saving for a home, first-time homeowners can use FHSA, TFSA, and the RRSP Home Buyer’s Plan. Talk to us for more details and if you have any questions about FHSAs or how they could help your family or someone you know, we’re here to answer your questions.

Key takeaways

  • Housing costs have cooled a bit since 2022 but are trending upwards again, posing challenges for first-time buyers.
  • The First Home Savings Account (FHSA), introduced by the Canadian government, offers a solution.
  • FHSA enables individuals to save up to $40,000 tax-free, potentially growing to $75,000 when combined with the Home Buyers’ Plan.
  • It also provides tax deductions akin to RRSPs and allows for integration with RRSPs when purchasing a home.
  • The time limit for utilizing FHSA funds, either within 15 years of opening or by age 71.

Resources for the first-time home buyer in your life