Open a First Home Savings Account as soon as you’re sure you qualify, even if you put nothing in yet. Your C$8,000 a year of room starts only in the year you open your first FHSA, up to C$40,000 over your lifetime. Contributions are generally deductible, like an RRSP, and a qualifying withdrawal to buy your first home is tax-free, like a TFSA. If you never buy, the money can move to your RRSP without tax.
The FHSA glossary entry has the short version. This guide covers the decisions around it.
The FHSA limits for 2026
Per person, in Canadian dollars
Source: Canada Revenue Agency, Participating in your FHSAs (September 2026)
Who can open one
You can open an FHSA if, at the time, you are:
- A resident of Canada.
- An adult. That’s 18, or 19 in provinces and territories where 19 is the age to sign a contract.
- 71 or younger on December 31 of the year you open it.
- A first-time home buyer. You didn’t live in a home you owned or jointly owned as your principal residence this calendar year or in the previous four. If you have a spouse or common-law partner, the same has to be true of them. A home you owned outside Canada counts too.
Each person opens their own. A couple who both qualify get C$40,000 of room each.
How the room and the deduction work
Room is per year, with a short memory. Contributions and transfers from your RRSP both use room. Unused room carries forward, but only up to C$8,000. Skip three years and you can still add only C$16,000 the next year. You don’t lose the C$40,000; it just takes longer to fill.
The deduction can wait. You don’t have to claim an FHSA contribution in the year you make it. The CRA lets you carry undeducted amounts forward, even past the account’s closing. If you’re early in your career and expect a raise, contributing now and deducting later can be worth more. One difference from RRSPs: a contribution in January or February counts only for that year, not the year before.
RRSP transfers give no new deduction. You can move RRSP savings into an FHSA, which turns money you’d have to repay under the Home Buyers’ Plan into money you never repay. But it uses FHSA room and isn’t deductible a second time.
The account has a clock. It ends on December 31 of the year the first of these happens: the 15th anniversary of opening your first FHSA, you turn 71, or the year after your first qualifying withdrawal. Anything still inside after that is added to your income, unless you moved it to an RRSP or RRIF first.
Taking the money out for a home
A withdrawal is tax-free only if all of this is true when you make it:
- You’re still a first-time buyer. For this test, the 30 days before the withdrawal don’t count against you.
- You have a written agreement to buy or build a home in Canada, closing before October 1 of the year after the withdrawal.
- You didn’t acquire the home more than 30 days before the withdrawal.
- You plan to live in it as your main home within a year of buying or building it.
- You stay a resident of Canada until you buy.
- You fill in Form RC725 and give it to your FHSA provider.
Miss one and the whole withdrawal is taxed as income that year.
FHSA, Home Buyers’ Plan, or both
| FHSA | Home Buyers’ Plan | |
|---|---|---|
| Money going in | Deductible | Comes from your RRSP, already deducted |
| Limit | C$40,000 of contributions | C$60,000 withdrawal |
| Pay it back | Never | Over 15 years |
| If you don’t buy | Move it to your RRSP tax-free | Not applicable |
You can use both for the same home. A couple who both qualify could bring up to C$200,000 from the two programs (C$40,000 of FHSA contributions and C$60,000 of HBP withdrawals each, before any investment growth). Use the FHSA first, because it never has to be repaid. Our guide to the Home Buyers’ Plan covers the repayment side.
Common mistakes
- Waiting to open one. No account, no room. Opening a year late can mean waiting an extra year to fill it.
- Going over the limit. The CRA charges 1% a month on the highest excess in each month. A C$3,000 excess costs C$30 a month until it’s gone. Check your own records, not just CRA My Account, which updates once a year.
- Moving money to your RRSP the wrong way. If you withdraw it yourself and then deposit it in your RRSP, the withdrawal is taxed and the deposit uses RRSP room. Ask for a direct transfer between institutions (Form RC721).
- Buying first, withdrawing later. If you acquire the home more than 30 days before you take the money out, the withdrawal doesn’t qualify.
- Claiming the deduction in a low-income year. A student or part-time year makes the deduction worth little. You can hold it.
- Investing next year’s down payment in stocks. Money you need within a year or two usually belongs in something that can’t fall much.
- Ignoring US tax if you’re a US citizen. The US may not treat the FHSA as tax-free. Read our guide to cross-border advisors first.
Questions to ask
Ask yourself these before you contribute, or bring them to a planner:
- When are we realistically buying: within two years, or five or more? That sets how to invest the account.
- Should I deduct this year or carry the deduction forward?
- Should I move existing RRSP savings into the FHSA?
- If we both qualify, how should we split contributions, the FHSA and the Home Buyers’ Plan between us?
- If we don’t buy, when do we move the money to our RRSPs, and how does that change our retirement plan?
And one for any advisor: “Do you or your firm earn anything from the account or the funds you’d put in it?” A fee-only planner answers no. A bank or commission-based advisor may be paid through the fund’s management expense ratio or a trailer fee.
When a fee-only planner is worth it
You don’t need a planner to open an FHSA and fill it every year. A planner earns the fee when the home decision touches everything else: buying with a partner whose income and first-time status differ from yours, combining the FHSA with the Home Buyers’ Plan and RRSP deductions, irregular self-employed income, or working out how much house you can afford without starving retirement savings.
In Canada, advice-only planners who publish prices charge a median C$1,900 for a one-time plan (middle half C$950 to C$3,000), C$250 an hour (middle half C$170 to C$298), or C$2,300 a year for ongoing planning. Those medians come from small samples: 46 firms for one-time plans, 15 for hourly rates and 21 for ongoing planning, so get two quotes. For a single question, such as how to sequence the FHSA and HBP, a few hours at an hourly rate is often enough. Our guide to what fee-only advisors charge in Canada explains what each price buys.
Where to look
Browse fee-only planners by province in the public graph: Ontario, British Columbia, Alberta, Quebec, Manitoba, Saskatchewan and Nova Scotia. You can also start from advisors for early-career professionals or newcomers, the flat-fee planning specialty, or the lists of fee-only advisors in Ontario and advisors for early-career professionals.
If you’re also deciding where the rest of your savings go, read RRSP vs TFSA and how TFSA contribution room works. For the bigger picture on buying, see planning for your first home.