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TFSA vs FHSA — which for first home?

Published 2026-05-13 · 8 min read · WealthWise

⚠️ For informational purposes only. This article presents facts and concepts. WealthWise is not a registered investment advisor. For any investment decision, consult a licensed advisor with your provincial regulator.

If you plan to buy your first home in 5-15 years, two accounts: TFSA (generalist, flexible) and FHSA (specific first-home, dual tax advantage). Here’s how to choose — or combine.

FHSA in 30 seconds

Launched 2023. Limit: $8,000/yr, $40,000 lifetime. Combines 2 advantages:

Tax deduction on contributions (like RRSP)
Tax-free withdrawal for first home (like TFSA)

Conditions: 18+, never owned in past 4 years. Max 15 years to use.

FHSA advantage — concrete numbers

$8,000 contribution at 35% marginal:

Tax deduction: $2,800 returned
5-year growth at 6%: $40,000 → ~$53,500
Withdrawal for purchase: tax-free

TFSA — more flexible

$7,500 limit in 2026, accumulated up to $102,000. No deduction but 100% free withdrawals for anything.

Optimal combination

First home in 5 years with $100,000 savings target:

$40,000 FHSA
$30,000 TFSA
$30,000 RRSP HBP (up to $60,000)

Total down payment: $100,000 + growth, fully tax-free!

Pitfall: prioritize FHSA before TFSA

Optimal order: (1) Max FHSA first, (2) Then TFSA, (3) RRSP HBP at purchase.

If not buying in 15 years

Unused FHSA: mandatory transfer to RRSP (without affecting RRSP room).

Frequently Asked Questions

FHSA + TFSA + RRSP HBP?

Yes. The 3 are complementary. Winning strategy for first-time buyer.

FHSA for spouse co-owner?

Yes. Each spouse can have FHSA. Total possible: $80,000 + growth.

Transfer FHSA to RRSP, lose advantage?

Lose only tax-free withdrawal. RRSP keeps tax deduction and shelter.

Contribute more than $8,000/yr?

No. $8,000 is strict annual max. Unused carries up to additional $8,000.