First Home Savings Account (FHSA)

A First Home Savings Account (FHSA) is a federally registered account created under the Income Tax Act (Canada) that allows first-time home buyers to contribute up to $8,000 per year (as of 2026-07-27 — verify current) to a lifetime limit of $40,000 (as of 2026-07-27 — verify current) on a tax-deductible basis, with tax-free withdrawals toward a qualifying home purchase. It is a federal program administered by the Canada Revenue Agency, not a BC provincial program, but can be used by eligible BC residents purchasing property in British Columbia. Verify current contribution limits and eligibility rules with a licensed tax professional before opening an FHSA.

Yes, under federal tax law you may combine tax-free FHSA withdrawals with RRSP withdrawals under the Home Buyers' Plan (HBP), which allows withdrawals up to $35,000 (as of 2026-07-27 — verify current) from your RRSP. Both programs are administered by the Canada Revenue Agency and can be used simultaneously for the same qualifying home purchase in BC. Verify current HBP and FHSA withdrawal limits and repayment rules with a licensed tax professional or the Financial Consumer Agency of Canada before proceeding.

BC's First-Time Home Buyers' Program exemption (or partial exemption) from Property Transfer Tax under the Property Transfer Tax Act, RSBC 1996, c. 378, has separate eligibility criteria based on whether you or your spouse have previously owned a principal residence anywhere in the world. Using a federal FHSA does not directly disqualify you from the BC PTT exemption, but both programs generally require "first-time" home buyer status — verify the specific provincial PTT eligibility and federal FHSA eligibility definitions with a BC notary, lawyer, or licensed tax professional, as the definitions may differ. The BC Ministry of Finance administers the PTT exemption; the Canada Revenue Agency administers the FHSA.

A "qualifying home purchase" for federal FHSA purposes is defined under the Income Tax Act (Canada) and generally requires the home to be located in Canada, that you intend to occupy it as your principal residence within one year, and that you meet the first-time home buyer test at the time of withdrawal. The home can be located anywhere in Canada, including British Columbia, and may include detached houses, condominiums (stratified under BC's Strata Property Act, SBC 1998, c. 43), townhouses, or mobile homes. Verify the detailed federal qualifying criteria and principal residence rules with a licensed tax professional before making an FHSA withdrawal.

FHSA contribution deductions are claimed on your federal income tax return under the Income Tax Act (Canada), which in turn reduces your taxable income for both federal and BC provincial tax purposes because BC provincial tax is calculated on the same taxable income base. This means FHSA contributions reduce both your federal and BC provincial tax liability. Verify the current tax treatment and how to claim the deduction with a licensed tax professional or the Canada Revenue Agency before filing.

Eligibility to open and contribute to an FHSA is governed by federal Income Tax Act (Canada) rules, which generally require you to be a first-time home buyer — defined as not having owned a home that you occupied as a principal residence in the current calendar year or the preceding four calendar years. Ownership of a rental or investment property may affect your eligibility depending on whether you ever occupied it as your principal residence. Verify your specific situation with a licensed tax professional or the Canada Revenue Agency before opening an FHSA.

Under federal Income Tax Act (Canada) rules, an FHSA must be closed by December 31 of the year that is the earliest of: (a) 15 years (as of 2026-07-27 — verify current) after opening the account, or (b) the year you turn 71 (as of 2026-07-27 — verify current), or (c) the year following your first qualifying withdrawal. If you do not make a qualifying withdrawal, any remaining balance must be transferred to an RRSP or RRIF, or withdrawn as taxable income. Verify current FHSA closure and transfer rules with a licensed tax professional or the Financial Consumer Agency of Canada.

No. Unlike the federal Home Buyers' Plan (HBP), which requires you to repay RRSP withdrawals over 15 years (as of 2026-07-27 — verify current), qualifying FHSA withdrawals do not need to be repaid under the Income Tax Act (Canada). FHSA withdrawals are tax-free and non-repayable if used for a qualifying home purchase. Verify that your withdrawal meets all federal qualifying criteria with a licensed tax professional before proceeding.

Property Transfer Tax under BC's Property Transfer Tax Act, RSBC 1996, c. 378, is calculated on the fair market value (or purchase price) of the property, regardless of the source of the buyer's funds (FHSA, RRSP, cash, mortgage, etc.). If you qualify as a first-time home buyer under the Act, you may be eligible for a full or partial PTT exemption up to $835,000 (as of 2026-07-27 — verify current) fair market value, which can significantly reduce or eliminate the tax owing. Verify your PTT exemption eligibility and current thresholds with a BC lawyer, notary, or the BC Ministry of Finance before completing your purchase.

The Financial Consumer Agency of Canada (FCAC) and the Canada Revenue Agency (CRA) provide official federal guidance on FHSA rules, contribution limits, and qualifying withdrawals at canada.ca. For questions about how an FHSA interacts with BC Property Transfer Tax, the First-Time Home Buyers' Program, or conveyancing, consult a BC lawyer or notary public. For tax and investment planning, verify all details with a licensed tax professional before opening an FHSA or making a withdrawal.