Nearly Half a Million Canadians Opened One. Millions More Haven't.
In its first full year, 484,320 Canadians contributed to a First Home Savings Account, according to Statistics Canada tax filing data. The median contribution was $8,000, which means most people who opened one maxed it out immediately. Over 57% of those contributors were between 25 and 34.
Those numbers sound promising until you realize there are roughly five million renters in Canada, millions of whom want to own a home at some point. The FHSA has been available since April 2023. Most eligible Canadians still haven't opened one.
Financial author David Chilton, best known for The Wealthy Barber, has called the FHSA "the greatest deal in the history of Canadian savings." It's genuinely one of the most advantageous registered accounts the federal government has ever created, and a significant number of the people it was designed to help don't know it exists or have put off opening one.
What the FHSA Actually Does
The First Home Savings Account combines the best tax features of an RRSP and a TFSA in a single account. Contributions are tax-deductible like an RRSP, so they reduce your taxable income in the year you contribute. Qualifying withdrawals for a first home purchase are completely tax-free, like a TFSA. You get the deduction going in and pay nothing coming out.
The annual contribution limit is $8,000. The lifetime limit is $40,000. Unused room from the previous year carries forward, up to a maximum of $8,000 in carry-forward room at any time. So if you opened an FHSA in 2025 and contributed nothing, you'd have $16,000 of available room in 2026.
To be eligible, you need to be a Canadian resident, at least 18 years old, and meet the CRA's first-time home buyer definition: you can't have lived in a home you owned at any point during the current calendar year or the four preceding calendar years. That window is broader than most people expect. Someone who sold a home five years ago can qualify.
The Detail Most People Miss: Room Only Accumulates After You Open It
Here's the most important thing to understand about the FHSA, and the most common mistake people make.
TFSA contribution room accumulates automatically every year once you turn 18, whether or not you have an account open. The FHSA does not work that way. Contribution room only starts accumulating from the year you open the account. Every year you wait is a year of room you cannot get back.
Someone who was eligible in 2023 and hasn't opened an FHSA yet has lost three years of room. They could have had $24,000 of contribution space by now. Opening the account, even with no money in it, starts the clock. There's no cost and no obligation to contribute right away.
What Happens to the Money If You Never Buy a Home
This hesitation keeps more people on the sidelines than it should.
If you decide homeownership is off the table, you can transfer your FHSA funds directly to an RRSP or RRIF without any tax consequences and without affecting your existing RRSP contribution room. The tax deduction you received on your original contributions stays with you. The growth inside the account remains sheltered.
A non-qualifying withdrawal, meaning cash taken out for reasons other than a first home purchase, is taxable as income, similar to an RRSP withdrawal. But the transfer-to-RRSP option means the worst-case scenario for someone who opens an FHSA and never buys a home is essentially a free RRSP top-up. The account has a maximum 15-year lifespan and must be closed by the end of the year you turn 71.
The FHSA and the Home Buyers' Plan Together
If you're serious about buying, there's an additional move worth knowing. The FHSA can be stacked with the RRSP Home Buyers' Plan, which lets a first-time buyer withdraw up to $60,000 from their RRSP toward a home purchase and repay it over 15 years.
Using both on the same purchase is allowed. A couple, each with their own FHSA and RRSP, could potentially access $40,000 each from their FHSAs (tax-free, no repayment required) plus up to $60,000 each from their RRSPs via the HBP. That's a substantial down payment built entirely inside registered accounts.
Who the FHSA Has Reached So Far
Statistics Canada's FHSA data shows that more than 61% of first-year contributors earned over $60,000. The account has so far been adopted most heavily by higher-earning younger Canadians.
Part of that is awareness. Part of it is disposable income. People with more financial breathing room are both more likely to know the account exists and more able to put $8,000 in during a given year.
The FHSA is income-blind by design. There's no income test to open one. Someone earning $35,000 a year who puts $500 a month into an FHSA still gets the tax deduction on those contributions and still benefits from tax-free growth. The account is available to any eligible Canadian regardless of income, and the awareness gap among lower-income renters who want to own is a real problem worth naming.
A BMO survey from late 2024 found that 40% of Canadians said they had at least some knowledge of the FHSA, up from 31% the year prior. Awareness is growing, but more than half of Canadians still aren't familiar with an account that's been available for nearly two years.
Over half of prospective first-time buyers said they planned to use the FHSA. That's a good sign. The gap is among people who haven't yet decided where homeownership fits in their future. Many of them are eligible right now and losing contribution room every year they wait.
The Practical Bottom Line
If you're a Canadian resident, at least 18, and haven't owned a home you lived in during the past five years, you're almost certainly eligible to open an FHSA today.
Opening the account costs nothing. You don't have to contribute immediately. But every year you delay is contribution room you can't recover. The account grows tax-free, contributions reduce your tax bill, and if you buy a home the withdrawals are completely tax-free. If you never buy, the money rolls into your RRSP without penalty.
Our FHSA calculator shows exactly how much contribution room you could be building, and what it might grow to before you buy.
The FHSA was designed to help renters become homeowners. The only thing required to start benefiting from it is opening one.
If you're ready to open an FHSA and want to compare where to hold it, many Canadian credit unions offer FHSAs alongside competitive high-interest savings rates. Browse and compare credit unions across Canada at CreditUnionDirectory.ca.
Sources
Statistics Canada — RRSP, TFSA and FHSA Contributions, 2023 (April 2025) Government of Canada — First Home Savings Account (FHSA) Government of Canada — Withdrawals and Transfers Out of Your FHSA Government of Canada — The Home Buyers' Plan BMO Financial Group — BMO Investment Survey: FHSA and First-Time Homebuyers, December 2024
