The FHSA Explained for GTA First-Time Buyers
Saving a down payment is the hardest part of buying a first home in the GTA — and the First Home Savings Account (FHSA) is the most powerful tool the government has ever given first-time buyers to do it faster.
It combines the best of both registered accounts: like an RRSP, your contributions are tax-deductible; like a TFSA, your withdrawals for a home are completely tax-free. Here’s how to use it.
How the FHSA works
You can contribute up to $8,000 per year to an FHSA, with a lifetime limit of $40,000. Every dollar you contribute reduces your taxable income for that year, so a buyer in a typical GTA tax bracket gets a meaningful refund back at tax time.
Inside the account, your money grows tax-free, and when you withdraw it to buy a qualifying first home, you pay no tax on the withdrawal or the growth. Unused annual room carries forward (up to a limit), so if you contribute $5,000 one year you can add the leftover $3,000 to next year’s room.
Who qualifies
You must be a Canadian resident, at least 18, and a first-time buyer — meaning you haven’t owned a home you lived in during the current year or the previous four calendar years. You have up to 15 years to use the account before it must be closed or rolled into an RRSP.
A couple buying together can each open an FHSA, effectively doubling the shelter to $80,000 toward one down payment — a serious head start on a GTA purchase.
Combining the FHSA with the RRSP Home Buyers’ Plan
You don’t have to choose. You can use the FHSA and the RRSP Home Buyers’ Plan (HBP) together on the same purchase. The HBP lets you borrow up to $60,000 from your RRSP (repayable over 15 years), while the FHSA money never has to be paid back.
Stacked, a couple could potentially bring well over $200,000 to a down payment across both accounts — enough to put 20% down on many GTA homes and avoid mortgage insurance.
Getting started
Open an FHSA at your bank or brokerage even before you’re actively shopping — opening it starts your contribution room. Because contributions are deductible, many buyers contribute early in the year and reinvest the tax refund.
Once you know your realistic budget, PropSmart’s AI search can show you what that down payment actually buys across the GTA today.
This article is general information, not financial, tax, or legal advice. Rates and program rules are current as of 2026 and can change — confirm the specifics with a qualified professional or your real estate lawyer before making decisions.