Saving for your first home in London, Ontario can feel overwhelming. But Canada has a special savings account made just for first-time home buyers — and many people have never heard of it. It’s called the First Home Savings Account, or FHSA for short. Let me explain it the way I’d explain it over coffee.
What is it?
The FHSA is a savings account registered with the government, created only for people buying their first home. Think of it as the best of two worlds: like an RRSP, the money you put in lowers the income tax you pay; and like a TFSA, the money you take out to buy your home is completely tax-free. Nothing else in Canada gives you both at the same time.
The numbers, kept simple
• You can put in up to $8,000 per year.
• The most you can put in, ever, is $40,000.
• If one year you can’t put in the full $8,000, you can carry the unused part to the next year — but only up to $8,000. So the most you can ever put in during a single year is $16,000.
One important detail: your contribution room only starts building after you open the account. If you open it in 2026 and put in nothing, you can put in up to $16,000 in 2027. But if you wait and never open it, those years don’t come back. That’s why the smartest move is to open it early — even before you have the money to contribute.
Who can open one?
Three simple requirements: you must be a resident of Canada, at least 18 years old, and a first-time home buyer. “First-time buyer” has a specific meaning here: it means you did not live in a home you owned during this year or the four years before it. So if you sold a home five or more years ago and have been renting since, you may qualify again.
What if you never buy?
You’re not trapped. If you never buy a home, you can move the money into your RRSP with no penalty. And the money can grow tax-free inside the account while you wait.
Can it be combined with other programs?
Yes — the FHSA can be used together with the Home Buyers’ Plan, which lets you withdraw up to $60,000 per person from your RRSP for your first home (that part must be repaid over 15 years). First-time buyers in Ontario can also get up to $4,000 back on the provincial land transfer tax. Talk to your mortgage advisor to see how these pieces fit your situation.
If buying your first home in London is on your horizon, opening an FHSA now — even with a small deposit — starts the clock on one of the most generous savings tools this country has ever created.
— Paola Cano & Jose Ramirez, Thrive Realty Group Inc., Brokerage, London, Ontario.