The Best of Both Worlds: Tax Benefits of the FHSA (Part 3/5)

The First Home Savings Account (FHSA) isn't just a place to stash your cash; it offers powerful tax benefits that make saving for a home even more rewarding. It's often called a "hybrid" account because it combines features of both RRSPs and TFSAs!

Two Major Tax Advantages:

1. Tax-Deductible Contributions (Like an RRSP!): When you contribute money to your FHSA, the amount you contribute is generally tax-deductible. This means you can subtract that contribution from your taxable income for the year, which can result in a lower tax bill or a larger tax refund!

   
   

2. Tax-Free Growth & Withdrawals (Like a TFSA!): Any investment income you earn inside your FHSA (like interest, dividends, or capital gains) grows tax-free. Even better, when you withdraw money from your FHSA to purchase a qualifying first home, those withdrawals are also tax-free!

   
   

These combined benefits make the FHSA a very attractive tool for aspiring homeowners, helping your savings grow faster and allowing you to use every dollar for your down payment without a tax hit.

Source: https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/make-most-your-first-home-savings-account.html?fbclid=PAZXh0bgNhZW0CMTEAAad2bSIRblTmeHV0x0q_mHdVGsSFv8Cek2iKlBnxdA-1idOajLMEuEuZ-q8yPA_aem_9RlKHg0DMvj_S3wgZ4NaJA