Quick answer
The First Home Savings Account lets first-time buyers contribute $8,000 a year, up to $40,000 in total, deduct the contributions like an RRSP, and withdraw the money tax-free to buy a qualifying first home. Room only starts once the account is opened, and at most $8,000 of unused room carries forward, so the most you can put in in one year is $16,000. The account must close within 15 years; unused money can move to an RRSP tax-free.
How the FHSA Works
Who can open one. A Canadian resident, at least 18 (19 in some provinces), under 72, who hasn't lived in a home they or their spouse owned this year or in the previous four calendar years.
Contributions. $8,000 a year, $40,000 for life. Contributions are tax-deductible, and you can save the deduction for a higher-income year.
The carry-forward trap. Room only starts the year you open the account. Unused room carries forward, but only up to $8,000. So open one now, even with $10 in it, if you might buy in the next few years.
Withdrawing. A qualifying withdrawal for your first home is tax-free and never repaid. You can also use the RRSP Home Buyers' Plan for the same purchase.
If you don't buy. The account must close by the end of the 15th year after you opened it, or when you turn 71. Money can move to an RRSP tax-free without using RRSP room.
Each spouse can have an FHSA. Two people, $80,000 of contributions, plus growth, plus up to $60,000 each from the Home Buyers' Plan.
Once you buy, the mortgage is the biggest debt your family has. See bank mortgage insurance vs term life.
FHSA Down Payment Calculator
Assumes contributions capped at $8,000 a year and $40,000 in total, monthly compounding, and refunds not reinvested. A planning estimate, not tax advice.
FHSA vs RRSP Home Buyers' Plan vs TFSA
| FHSA | RRSP (HBP) | TFSA | |
|---|---|---|---|
| Tax deduction going in | Yes | Yes | No |
| Tax-free withdrawal for a home | Yes | Yes, but must be repaid over 15 years | Yes, for anything |
| 2026 limit | $8,000 a year, $40,000 lifetime | Up to $60,000 via the Home Buyers' Plan | $7,000 a year |
| Must be a first-time buyer | Yes | Yes, for the HBP | No |
FHSA: Your Questions
How much can I put in an FHSA in 2026?
$8,000 a year, plus up to $8,000 of unused room carried forward from earlier years, to a lifetime total of $40,000.
Does FHSA room build up before I open the account?
No. Room starts in the year you open your first FHSA. That's why it can pay to open one early.
Is an FHSA withdrawal taxed?
No, if it's a qualifying withdrawal to buy your first home. Contributions are also tax-deductible.
Can I use the FHSA and the Home Buyers' Plan together?
Yes. You can use both for the same qualifying home, with up to $60,000 from your RRSP through the HBP.
What if I never buy a home?
Before the account closes, you can transfer the money to your RRSP or RRIF tax-free without using RRSP room. Otherwise, withdrawals are taxed.
Can newcomers open an FHSA?
Yes, if you're a Canadian resident for tax purposes, meet the age rules, and haven't lived in a home you owned this year or the previous four years, including one abroad.
Pankaj Bhatia, PFA, CHS
Pankaj is a licensed insurance advisor with offices in Mississauga and Cambridge, Ontario, and a member of Advocis. He helps families compare Super Visa and visitor plans from Canadian insurers and sorts out claims and refunds when plans change.
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