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What is an FHSA?

An FHSA is a registered account for first-time home buyers in Canada that lets you deduct what you put in and take it out tax-free to buy your first home.

By Mathieu Raymond, founder of Kova

Published

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Who can open an FHSA

You can open an FHSA if you meet all three conditions:

  • Age: you're 18 or older, and 71 or younger on December 31 of the year you open it.
  • Residency: you're a resident of Canada.
  • First-time buyer: you didn't live in a home you owned, this year or in the four calendar years before. If you have a spouse or common-law partner, they can't have owned the home you lived in during that time either.

How much you can put in

  • Each year

    2026: $8,000

  • Over your lifetime

    2026: $40,000

  • Unused room you can carry forward

    2026: Up to $8,000

Your room starts in the year you open your first FHSA, not the year you turn 18. Until you open one, no room builds up.

If you don't use all of a year's $8,000, up to $8,000 of it carries forward to the next year. So the most you can put in during one year is $16,000. Having more than one FHSA doesn't give you more room.

Putting in more than your room costs 1% of the extra amount for each month it stays in the account.

The tax rules, going in and coming out

Going in. What you put in is deductible, like an RRSP contribution, so it lowers your taxable income. You don't have to claim the deduction in the year you contribute. You can save it for a year when your income, and your tax rate, is higher.

Coming out. A qualifying withdrawal to buy your first home isn't taxed at all. That's what makes the FHSA different from both the RRSP and the TFSA: a deduction going in and no tax coming out.

A withdrawal qualifies when:

  • you're still a first-time home buyer when you take the money out,
  • you have a written agreement to buy or build the home before October 1 of the year after the withdrawal,
  • you bought the home no more than 30 days before the withdrawal,
  • you plan to live in it as your main home within one year of buying or building it,
  • you stay a resident of Canada until you buy it.

If a condition isn't met, the withdrawal is taxed as income.

You can use an FHSA and the RRSP Home Buyers' Plan for the same home.

If you don't buy a home

Unused savings can move to an RRSP or RRIF without using any RRSP room. They're taxed when they come out of the RRSP later, like any other RRSP money. You can also take them out of the FHSA directly, as taxable income.

An FHSA must close by the end of the year of the 15th anniversary of opening your first FHSA, or the year you turn 71, if that comes first.

Where to find your room

Once you've opened an FHSA, your notice of assessment shows your participation room for the next year. You'll also find it in CRA My Account. Banks report FHSA activity after the year ends, so this year's deposits may not show yet.

Compare the FHSA, RRSP and TFSA

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