How the First Home Savings Account works
The First Home Savings Account (FHSA) is a federal program built for first-time buyers. Here's what it does:
You can put in up to $8,000 a year, tax-free. The lifetime cap is $40,000. Every dollar you contribute lowers your taxable income that year — which means a tax refund you can actually use.
It's not just a place to park cash. It's a way to turn your own savings into a bigger down payment, with help from the government.
What you get back at tax time
Your tax refund depends on how much you earn. The table below shows what you could get back federally if you contribute the full $8,000 in a year:
Annual Income | Potential Tax Refund $75,000 | $2,440 $80,000 | $2,440 $85,000 | $2,440 $90,000 | $2,440 $95,000 | $2,440 $100,000 | $2,440 $105,000 | $2,880 $110,000 | $2,880 $115,000 | $2,880 $120,000 | $2,880 $125,000 | $2,880 $130,000 | $2,880 $135,000 | $3,040 $140,000 | $3,040 $145,000 | $3,040 $150,000 | $3,040
These are federal refunds. Provincial refunds add more on top, depending on where you live.
How to hit $40,000 with less out of pocket
Here's the move: take your tax refund and put it right back into the FHSA. That way, you only need to come up with the full $8,000 in year one. After that, you're contributing around $5,560 of your own money each year — about $107 a week — and letting the refund do the rest.
The table below breaks down how much you'd actually need to save versus how much comes from refunds, depending on your income:
Income | Own Funds Needed | Refund Contribution | Total Goal Achieved $75,000 | $27,800 | $12,200 | $40,000 $80,000 | $27,800 | $12,200 | $40,000 $85,000 | $27,800 | $12,200 | $40,000 $90,000 | $27,800 | $12,200 | $40,000 $95,000 | $27,800 | $12,200 | $40,000 $100,000 | $27,800 | $12,200 | $40,000 $105,000 | $25,600 | $14,400 | $40,000 $110,000 | $25,600 | $14,400 | $40,000 $115,000 | $25,600 | $14,400 | $40,000 $120,000 | $25,600 | $14,400 | $40,000 $125,000 | $25,600 | $14,400 | $40,000 $130,000 | $25,600 | $14,400 | $40,000 $135,000 | $24,800 | $15,200 | $40,000 $140,000 | $24,800 | $15,200 | $40,000 $145,000 | $24,800 | $15,200 | $40,000 $150,000 | $24,800 | $15,200 | $40,000
So if you're earning $135,000, you'd contribute roughly $24,800 of your own cash over five years. The government kicks in $15,200 through refunds. That's how you get to $40,000.
More tools for first-time buyers
Want to understand how much you'll actually need for a down payment? This guide walks you through the minimums and the options.
Your credit score affects your rate and your options. Here are five ways to improve it before you apply.
Budgeting matters — it shows you what you can actually afford and keeps you out of trouble once you own the place.
Calculations here use current federal and provincial tax rates. Your refund will depend on your specific situation, so run the numbers with your accountant or financial planner before you commit.
