For many newcomers, buying a first home in Canada is an exciting milestone. Saving for a down payment, however, often takes planning, time and the right savings tools.
To help support first-time homebuyers, the Government of Canada introduced the First Home Savings Account (FHSA), a registered savings plan designed to help eligible Canadian Residents save toward the purchase of a first home. The FHSA offers tax deductible contributions, tax-free growth, and tax-free withdraws when used to purchase your first time.
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If home ownership is part of your future plans in Canada, understanding how the FHSA works can help you decide whether it fits into your overall financial strategy.
In this article, we’ll cover:
- What an FHSA is – An overview of how the account works
- Who may be eligible – Requirements for opening an FHSA
- Getting started – What to know before opening an FHSA
- FHSA compared to other registered plans – How it differs from a TFSA or RRSP
- Why some newcomers choose TD – A few features and support options to consider
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Understanding the First Home Savings Account (FHSA)
The First Home Savings Account (FHSA) is a registered savings plan introduced by the Government of Canada to help eligible Canadians residents save toward the purchase of a first home in Canada. Eligible newcomers to Canada can also open an FHSA if they meet eligibility requirements.
With an FHSA, you can contribute up to $8,000 annually, to a lifetime maximum of $40,000. Contributions may be tax-deductible, and any qualifying withdrawals used toward the purchase of a qualifying first home — including investment growth earned within the account — can be withdrawn tax free.
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FHSA Eligibility: Who Can Open an Account?
To open a First Home Savings Account (FHSA), you must meet certain eligibility requirements established by the Canada Revenue Agency (CRA). You must:
- Be a resident of Canada
- Be at least 18 years old[1]
- Have a valid Social Insurance Number (SIN)
- Be a first-time home buyer[2]
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3. Opening an FHSA: What to Expect
Opening a First Home Savings Account (FHSA) begins with speaking to your FHSA issuer, such as a bank, credit union or a trust or insurance company. At TD, you can speak to a Personal Banker about your savings goals and eligibility. To open an account, you’ll need valid identification, your SIN, proof of Canadian residency and a completed application. It is important to ensure you meet the first-time home buyer requirement before opening this account as not meeting the requirements can cause tax implications.
Once your FHSA is set up, you can begin contributing toward your future home purchase.
TD offers different FHSA options depending on how you prefer to save and invest:
- Multi-Holding First Home Savings Account – Allows you to hold a combination of cash, Guaranteed Investment Certificates (GICs) and mutual funds within a single account
- TD Waterhouse First Home Savings Account – A self-directed investing option that provides access to a broader range of investments, including stocks, bonds, mutual funds and GICs
Each FHSA option offers different features, so speaking with a TD personal banker can help you find the account that best fits your needs and comfort level.
4. FHSA Compared to an RRSP or TFSA
When saving toward your first home in Canada, it is helpful to understand how the First Home Savings Account (FHSA) differs from other registered savings plans commonly used by Canadians. Here is a simple comparison:
- RRSP and FHSA
A Registered Retirement Savings Plan (RRSP) is primarily intended to help Canadians save for retirement. However, eligible first-time homebuyers may also use funds from their RRSP through the Home Buyers’ Plan (HBP). Under the HBP, you may withdraw up to $60,000 toward the purchase of a qualifying home, but the withdrawn amount must be repaid over time. Once the annual repayment period has begun, you must repay the minimum required amount each year during the repayment period. If a repayment is missed the amount missed must be reported as income.
An FHSA works differently. Eligible withdrawals used toward the purchase of a qualifying first home are tax-free and do not need to be repaid. This includes any investment growth earned within the account.
- TFSA and FHSA
A Tax-Free Savings Account (TFSA) offers flexibility to save for a variety of financial goals, both short and long term. Eligible withdrawals from a TFSA are tax-free, which is one reason some Canadians use a TFSA to help save toward a future home purchase.
The FHSA, however, was created specifically to support eligible first-time homebuyers. It combines features associated with both the RRSP and TFSA by offering tax-deductible contributions and tax-free withdrawals when the funds are used for a qualifying first home purchase.[3]
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5. Why Choose TD for FHSA?
As you settle into life in Canada, choosing the right banking partner may help make saving toward your first home feel more manageable. TD offers a range of tools, account options and support services that may help newcomers as they plan for home ownership.
- Support for Planning Ahead
Saving for a down payment is just one part of preparing to buy a home. Tools such as the TD Mortgage Affordability Calculator may help you better understand how your income, expenses and savings could fit into your future homebuying plans.
- Investment Options Within Your FHSA
A TD FHSA can hold more than cash savings alone. Depending on the type of account you choose, you may also have access to investment options such as Guaranteed Investment Certificates (GICs), stocks, bonds, and mutual funds.
- Guidance Based on Your Goals
When you meet with a TD Personal Banker, they can use the TD Goal Builder to help you develop customized goals and translate them into a tangible roadmap that you can adapt or modify over time.
For many newcomers, buying a first home in Canada takes planning, patience and the right financial tools. The First Home Savings Account (FHSA) may help eligible first-time homebuyers save toward that goal while benefiting from tax advantages designed specifically for home ownership savings. By understanding how the FHSA works — and how it compares to other registered plans — you can make more informed decisions as you plan for your future in Canada.
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Why Choose TD?
More than 160 years of helping Canadians:
TD has a proud history of delivering financial solutions to Canadians for more than 160 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.
With over a thousand branches, and the ability to also serve you in more than 80 different languages, TD has become one of the largest and most trusted banks in Canada, now serving 16 million Canadians.
TD offers online support and resources of interest to newcomers on topics such as banking basics, moving to Canada, credit score essentials, and more. TD is open longer hours for your convenience and has thousands of ATMs across Canada to help you take care of your everyday banking needs quickly and easily.
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Sources:
- Canada Revenue Agency. First Home Savings Account (FHSA). Government of Canada, 2025. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html (accessed May 22, 2026).
- Canada Revenue Agency. Opening, Closing and FHSA. Government of Canada. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/opening-closing-and-fhsa.html (accessed May 22, 2026).
[1] In certain provinces and territories, the legal age at which an individual can enter into a contract including opening a FHSA is 19. You must be at the age of majority in your province of residence and provide a valid Social Insurance Number (SIN). FHSA cannot be opened after the end of the year you turn 71.
[2] An individual is considered to be a first-time home buyer if at any time in the part of the calendar year before the account is opened or at any time in the preceding four years they did not live in a qualifying home (or what would be a qualifying home if located in Canada) that either (i) they owned or (ii) their spouse or common-law partner owned (if they have a spouse or common-law partner at the time the account is opened).
[3] Canada Revenue Agency. First Home Savings Account (FHSA). Government of Canada, 2025. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html (accessed May 22, 2026).