Both grow tax-free. But the FHSA also gives you a tax deduction on contributions — like an RRSP — while still letting you withdraw tax-free when you buy your first home. For first-time buyers, FHSA is strictly better. For everyone else, TFSA. The catch: the FHSA closes after 15 years (or your first home purchase), and unused room is mostly lost.
Same balance growth. FHSA stacks $42,000 in tax refunds on top — yours to reinvest, pay down debt, or save for closing costs.
| TFSA | FHSA | |
|---|---|---|
| Annual contribution limit | $7,000 (2025) · $7,500 (2026) | $8,000 |
| Lifetime limit | Cumulative since age 18 (2009+) | $40,000 lifetime |
| Tax deduction on contribution | No | Yes — like RRSP |
| Tax on withdrawal | None ever | None — if used for first home |
| Tax on growth | None | None |
| Can be used for anything | Yes | No — first home only |
| Re-contribute withdrawals | Yes — next year | No |
| Account lifespan | Forever | Closes after 15 years or first home |
| Eligibility | 18+ Canadian resident | 18-71 first-time home buyer |
| Carryover unused room | Yes — indefinitely | Only $8K from prior year |
Goal: $80K down payment in 4 years. Maxes FHSA at $8K/yr · gets ~$2,800/yr tax refund (35% bracket) · reinvests refund in TFSA. Closes FHSA at home purchase. Total refund over 4 years: $11,200 — free money that funds closing costs.
Doesn't qualify for FHSA (not first-time buyer). Maxes TFSA at $7K/yr for retirement nest egg. Growth and withdrawals tax-free forever. No deadline to use the money.
Uncertain about home purchase but qualifies. Opens FHSA to start the 15-year clock (Year 1) and contributes $8K/yr. If she buys: tax-free withdrawal. If she doesn't: transfers FHSA to RRSP at year 15 — no tax impact, no room used. Best of both worlds.