CANADIAN FIRST-HOME SAVINGS
Saving for a first home?
Meet the FHSA.
A potential tax deduction on the way in. A tax-free qualifying home withdrawal on the way out. Start with the rules, then choose where to open it.
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THE 20-SECOND VERSION
An account for an eligible first-home buyer.
The First Home Savings Account is a Canadian registered plan. Eligible contributions are generally deductible; a withdrawal that meets the home-buying conditions is tax-free. The account itself is not an investment and does not guarantee a return. CRA overview ↗
01 · CHECK ELIGIBILITY
“First-time buyer” has a specific meaning.
To open an FHSA, you must be a Canadian resident, at least 18 (19 where the local contract age requires it), and no older than 71 at year-end. You must also meet the opening test: during the current year and the previous four calendar years, you generally must not have lived in a principal home owned by you or your current spouse or common-law partner.
That is more specific than “I have never bought a house.” Check the complete test before applying. The definition for making a qualifying withdrawal is different. Read CRA eligibility conditions ↗
02 · UNDERSTAND YOUR ROOM
$8,000 to start. A $40,000 lifetime limit.
Room begins when you open your first FHSA. Unused participation room can carry forward, generally up to $8,000. The limits apply across all your FHSAs together; another account does not give you another allowance. RRSP-to-FHSA transfers use participation room too, without a new deduction.
For a simple example, opening in 2026 and contributing $3,000 leaves $5,000 unused. With no other activity or special adjustments, the next year’s room would be $13,000: $8,000 plus $5,000. Your own contribution history matters. Check the CRA calculation ↗
03 · PLAN THE WITHDRAWAL
Tax-free is conditional.
A qualifying home withdrawal does not need to be repaid. You must meet every condition, including the withdrawal-specific first-time-buyer test, a written agreement for a qualifying Canadian home, residency requirements and an intention to occupy it as your principal residence.
Timing matters: the agreement must provide for purchase or completion before October 1 of the year after withdrawal; you cannot have acquired the home more than 30 days before withdrawing. Give your issuer Form RC725 and check the full conditions before moving money. Other withdrawals may be taxable. Review all withdrawal conditions ↗
04 · KNOW THE CLOCK
Opening starts more than your contribution room.
Your participation period ends December 31 of the earliest applicable year: the year of the 15th anniversary of opening, the year you turn 71, or the year following your first qualifying withdrawal. If plans change, eligible direct transfers to your RRSP or RRIF can generally defer tax. Taking the money out as an ordinary withdrawal can instead create taxable income. Read the closing and transfer rules ↗
05 · COMPARE THE RIGHT THINGS
The home-buying date comes first.
Make a shortlist of what the money needs to do. Ask each issuer about the investments offered, access to the money, maturity dates, account fees and the time needed to process a qualifying withdrawal. A platform’s stock-trading features may be less relevant than having your down payment available when needed.
The FHSA label does not remove investment risk. Canadian tax benefits also do not settle obligations to another country; get qualified guidance if you have cross-border tax responsibilities.
PRIMARY SOURCES