FHSA (first home savings account)

Annual and lifetime limits

Your participation room in the year you open your first FHSA is $8,000. In later years you generally get another $8,000 plus unused room carried forward, subject to the CRA’s calculation, and you can find the figure for each year in your CRA account. The lifetime limit is $40,000.

Room covers all of your FHSAs combined, and transfers from your RRSP count against it together with contributions. Investment income earned in the account does not use up room. To open an account you must be 18 or older, a Canadian resident, no older than 71 at year end and a first-time buyer under the CRA’s test.

Deductions follow the calendar year

The contribution period is January 1 to December 31. Unlike an RRSP, a contribution in the first 60 days of a year cannot be deducted for the previous year. Unused contributions can be carried forward and deducted later, and transfers from your RRSP reduce the amount you can deduct over your lifetime.

File Schedule 15 with the return for the year you open your first FHSA, even if you made no contribution, so the CRA records the account. Your participation room statement then appears on your notice of assessment.

An illustrative example

Suppose you open an FHSA in 2026 and contribute $5,000 in December. Your 2026 room was $8,000, so $3,000 is unused and carries forward, giving 2027 room of $11,000. You can deduct the $5,000 on your 2026 return or carry it forward. Contributing another $3,000 in January 2027 would not help the 2026 return. The figures are illustrative.

Qualifying withdrawals

A withdrawal is tax-free only if every condition is met. You must be a first-time buyer for withdrawal purposes, have a written agreement to buy or build a qualifying home with the acquisition or construction completed before October 1 of the year after the withdrawal, not have acquired the home more than 30 days earlier, remain a Canadian resident, intend to live there within one year and give your issuer Form RC725.

If a condition is not met, the withdrawal is taxable. Excess contributions are taxed at 1% per month on the highest excess in the month, and a qualifying withdrawal does not clear an excess.

What to discuss with your accountant

Ask whether to deduct contributions now or later, how an FHSA sits alongside the Home Buyers’ Plan and your RRSP, and what records to keep for a qualifying withdrawal.