FHSA explained: the First Home Savings Account rules for 2026

What an FHSA is

The FHSA borrows from two familiar registered accounts. Like an RRSP, the money you put in is deductible from your income. Like a TFSA, the money you take out to buy a qualifying first home isn’t taxed, and you never pay it back. Growth inside the account isn’t taxed either.

An FHSA can hold cash, GICs and investments such as index funds, depending on where you open it. The account is yours alone: only the holder can claim the deduction for contributions.

Who can open an FHSA

You must meet every condition when you open the account:

• You’re a resident of Canada
• You’re at least 18, or 19 where that’s the legal age in your province
• You’re no older than 71 on December 31 of the year you open it
• You’re a first-time home buyer

First-time home buyer has a specific meaning. In the current calendar year or the previous 4 calendar years, you can’t have lived as your principal residence in a home that you owned or jointly owned. The same applies to a home your spouse or common-law partner owned in that period. So someone who sold a home five years ago can qualify again.

Contribution limits and carry-forward

Your participation room is $8,000 in the year you open your first FHSA. The lifetime limit is $40,000 across all your FHSAs. Room only starts building once you open an account, so opening one early, even with a small deposit, starts the clock on your room.

If you don’t use a full year’s room, up to $8,000 of it carries forward to the next year. The most you can contribute in one year is therefore $16,000. Unused room above $8,000 doesn’t carry forward.

You don’t have to deduct a contribution in the year you make it. Contributions you don’t deduct can generally be carried forward and claimed in a later year, which can make sense if you expect a higher income soon. Money transferred in from an RRSP counts toward your limits but isn’t deductible, since it was already deducted when it went into the RRSP.

A worked example

Our FHSA calculator runs this for your own numbers, including the tax refund from your deductions.

Qualifying withdrawals for a first home

A qualifying withdrawal is tax-free and isn’t repaid. To make one, all of these must be true:

• You’re a first-time home buyer at the time of the withdrawal. The 30 days before the withdrawal don’t count against you, so you can move in just before taking the money.
• You have a written agreement to buy or build a qualifying home, with a completion date before October 1 of the year after the withdrawal
• You intend to live in the home as your principal residence within one year of buying or building it
• You stay a resident of Canada from your first qualifying withdrawal until you get the home
• You give your FHSA issuer Form RC725

Any other withdrawal is taxable and added to your income for the year. A qualifying withdrawal also doesn’t remove an excess amount, so fix any over-contribution first.

Combining the FHSA with the Home Buyers’ Plan

You can use both for the same home. The Home Buyers’ Plan lets you withdraw up to $60,000 from your RRSP, as long as you meet the conditions for each withdrawal. One buyer could use $40,000 of FHSA contributions plus $60,000 from an RRSP, or $100,000 before growth. A couple who both qualify could use $200,000.

The difference is repayment. FHSA money is never paid back. HBP money must be repaid to your RRSP over 15 years. For first HBP withdrawals from January 1, 2026 to December 31, 2028, repayments start in the fifth year after the withdrawal, so a 2026 withdrawal means your first repayment year is 2031.

If you don’t buy a home

An FHSA can stay open until December 31 of the year of the earliest of these: the 15th anniversary of opening your first FHSA, the year you turn 71, or the year after your first qualifying withdrawal. Someone who opened one in 2025 must wrap it up by December 31, 2040.

If you decide not to buy, you can transfer the balance directly to your RRSP or RRIF. That move is tax-deferred and generally doesn’t use any of your RRSP deduction room, so you keep the deductions you already claimed. You can also take the money out, but it’s taxed as income. Anything still in the account after the deadline is added to your income.

Where to open an FHSA

Banks, credit unions and brokerages offer FHSAs. Cash and GICs in an FHSA at a CDIC member are insured as their own category, up to $100,000. Savings accounts we list include:

In our GIC data, EQ Bank, Meridian Credit Union, RBC and TD offer FHSA GICs. Tangerine and Oaken Financial list TFSA and RRSP GICs but not FHSA ones. If you want stock or ETF investments, you’ll need an FHSA at a brokerage.