Canadians can save for their first home with new tax-free First Home Savings Account

News release

August 10, 2023 - Ottawa, Ontario - Department of Finance Canada

As house prices have climbed, saving for a down payment has become increasingly out of reach for far too many Canadians, particularly young people. The government’s new tax-free First Home Savings Account is now available and will help put homeownership back within reach for Canadians across the country.

The new tax-free First Home Savings Account is a registered savings account that helps Canadians become first-time home buyers by contributing up to $8,000 per year (up to a lifetime limit of $40,000) for their first down payment, within 15 years. To help Canadians reach their savings goals, First Home Savings Account contributions are tax deductible on annual income tax returns, like a Registered Retirement Savings Plan (RRSP). And, like a Tax-Free Savings Account (TFSA), withdrawals to purchase a first home—including any investment income on contributions—are non-taxable. Tax-free in; tax-free out.

As of today, First Home Savings Accounts are available at seven financial institutions, and more are set to offer First Home Savings Accounts soon.

Here is an example of how the First Home Savings Account can help Canadians save for their first down payment and benefit from tax relief:

  • Olivia and Amira are looking for a first home in Ontario. They each save the maximum $8,000 per year in their First Home Savings Account, which they can deduct from their income at tax time. They both make between $70,000 and $100,000, which means for every $100 contributed to their First Home Savings Account they receive $20.50 in federal tax savings to each receive an annual federal tax refund of $1,640.
  • After five years of saving, Olivia and Amira have a combined $90,000 (including $10,000 in investment returns) that they can withdraw tax-free for a down payment on their first home. Over five years, they will have benefitted from a combined $18,450 in federal tax relief, in addition to nearly $8,000 in provincial tax relief.
  • They use their First Home Savings Account as a 10 per cent down payment to qualify for a mortgage and purchase their first home for $900,000.
  • When Olivia and Amira file their taxes after buying their first home, they will receive an additional $1,500 in federal tax relief through the First-Time Home Buyers’ Tax Credit.


“Our government believes that everyone should have an affordable place to call home, and we are focused on building more homes and making housing more affordable across the country. For too many Canadians, saving for that first down payment seems impossible and out of reach. That is why we promised and are delivering on the new tax-free First Home Savings Account—a key part of our plan to put homeownership back within reach of Canadians and to help Canadians save for their first home.”

- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“For too many Canadians the dream of owning their first home is slipping further out of reach. That’s why our government is introducing the First Home Savings Account, a tax-free account for aspiring homeowners to save for the home of their dreams. This initiative is a testament to our government's commitment to help families find and afford a safe place to call home.”

- The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities

“As we emerge from the global inflation crisis, Canadians are seeing the signs of economic recovery and are saving to buy their dream home through the new First Home Savings Account. Tens of thousands of young Canadians are already taking advantage of this new tax-free way to put aside money to build their future. This game-changing way to invest will allow more young Canadians to become homeowners, while leaving more money in their pockets.”

- The Honourable Marci Ien, Minister for Women and Gender Equality and Youth

“Canadians can now reach their goal of home ownership quicker through the tax-free First Home Savings Account. By opening up an account, Canadians can save up to $8,000 tax-free each year and make their money go further. In combining measures that help put homeownership within reach, like the First Home Savings Account, with a strategic and economic immigration approach, the federal government is making housing more affordable and bringing in the skilled workers required to build more homes. With provinces needing workers to meet housing demands and the home building sector facing immense challenges in acquiring talent, it is crucial for immigration to be factored into the overall approach as newcomers are an undeniable part of the solution.”

- The Honourable Marc Miller, Minister of Immigration, Refugees and Citizenship

Quick facts

  • The new tax-free First Home Savings Account is a registered savings account that helps Canadians become first-time home buyers by contributing up to $8,000 per year until they reach the $40,000 contribution limit (within 15 years of opening their account) for their first down payment, and delivers tax relief when they file their taxes to help them meet their contribution goals.

    • Any Canadian resident at least 18 years of age, and not more than 71 years of age on December 31 of the year, can open a First Home Savings Account to save for their first home.
    • Unused contribution room up to the $8,000 annual maximum and unclaimed contributions can be carried forward.
  • Financial institutions have been able to offer the First Home Savings Account to Canadians since April 1, 2023. 

  • The First Home Savings Account can be combined with the Home Buyers’ Plan, which allows Canadians to withdraw up to $35,000 from their RRSPs to buy or build a qualifying home for themselves or for a relative with a disability. Amounts withdrawn under the Home Buyers’ Plan must be recontributed to an RRSP on a non-deductible basis over a period not exceeding 15 years. 

  • The new First Home Savings Account to help Canadians save for their down payment builds on the federal government’s work to accelerate housing construction and make homes more affordable for Canadians. This plan includes:

    • A two-year ban on non-resident, non-Canadians purchasing residential property to help curb speculation and ensure that houses are used as homes for Canadians to live in, rather than as financial assets for foreign investors;
    • A one per cent annual underused housing tax on the value of non-resident, non-Canadian owned residential property that is vacant or underused;
    • Making sure that profits from flipping properties held for less than 12 months are taxed fully and fairly;
    • Doubling the First-Time Home Buyers’ Tax Credit to provide up to $1,500 in direct support to home buyers to offset expensive closing costs involved in buying a first home;
    • A new, refundable Multigenerational Home Renovation Tax Credit, to provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability, starting this year;
    • Applying the Goods and Services Tax/Harmonized Sales Tax to all assignment sales of newly constructed or substantially renovated residential housing, to help address speculative trading in the housing market;
    • Launching the new $4 billion Housing Accelerator Fund to remove local zoning barriers and incentivize housing construction, with the goal of creating at least 100,000 net new homes across Canada;
    • Launching a $200 million stream under the Affordable Housing Innovation Fund to develop and scale up rent-to-own projects;
    • Launching a third round of the Rapid Housing Initiative, which is providing $1.5 billion to create 4,500 new affordable housing units for Canadians in severe housing need, with 25 per cent of investments going to housing projects targeted towards women;
    • Delivering over $500 million towards the government’s goal of ending chronic homelessness, through Reaching Home, Canada’s Homelessness Strategy; and,
    • Delivering a top-up to the Canada Housing Benefit in December 2022, which provided low-income renters with a $500 payment to help with the cost of housing.

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Media may contact:

Katherine Cuplinskas
Press Secretary and Senior Communications Advisor
Office of the Deputy Prime Minister and Minister of Finance

Media Relations
Department of Finance Canada

General enquiries
Phone: 1-833-712-2292
TTY: 613-369-3230

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