Guides> FHSA
FHSA — First Home Savings Account: complete guide 2026
The FHSA combines the benefits of the RRSP (deductible contributions) and the TFSA (tax-free withdrawals) for the purchase of a first home. A powerful tool launched in 2023.
How It Works and Eligibility
The FHSA allows a tax deduction on contributions (like the RRSP) and a tax-free withdrawal for the purchase of a qualifying first home (like the TFSA). It truly offers the best of both worlds.
To be eligible, the individual must: • Be a Canadian resident aged 18 or older • Not have lived in a home they owned during the year of account opening or the preceding 4 calendar years • Neither their spouse nor common-law partner may have owned a qualifying home during that period
Contribution Limits
The annual limit is $8,000 and the lifetime limit is $40,000. Unused room carries forward up to a maximum of $8,000 (meaning a maximum of $16,000 in one year including carry-forward).
The account must be used within 15 years of opening, or before the end of the year the account holder turns 71. After 15 years, unused funds can be transferred to an RRSP (without affecting RRSP contribution room) or withdrawn as taxable income.
Interaction with the Home Buyers' Plan (HBP)
The FHSA and the HBP can be used simultaneously for the same purchase. A first-time buyer could:
• Withdraw up to $40,000 from the FHSA (tax-free, no repayment required) • Withdraw up to $60,000 from their RRSP via the HBP (tax-free, with repayment over 15 years) • Total: up to $100,000 tax-free for a down payment
For a couple of first-time buyers, the combined total could reach $200,000. This is a very powerful strategy that advisors should systematically present to eligible clients.
Strategies for Advisors
Open the FHSA as early as possible, even with a small amount, to start the 15-year clock and begin accumulating contribution room.
If the client ultimately does not buy a home, the funds can be transferred to an RRSP without affecting RRSP contribution room. This safety net makes the FHSA a uniquely risk-free planning tool.
The tax deduction can be deferred to a future year when income (and therefore the marginal rate) is higher, maximizing the tax benefit.
Frequently Asked Questions
Can you use the FHSA and the HBP at the same time?
Yes. A first-time buyer can withdraw up to $40,000 from the FHSA and up to $60,000 from their RRSP via the HBP for the same purchase. The FHSA withdrawal does not have to be repaid, unlike the HBP.
What happens if I never buy a home?
After 15 years (or at age 71), the funds can be transferred to an RRSP without affecting your RRSP contribution room. Otherwise, they must be withdrawn as taxable income. The transfer to an RRSP is generally the better option.
Is there a minimum age to open an FHSA?
Yes, 18 years of age (18 or 19 depending on the province). There is no maximum age to open the account, but it must be closed by December 31 of the year the account holder turns 71.
Are FHSA contributions deductible like RRSP contributions?
Yes, exactly like RRSP contributions. And unlike the RRSP, eligible withdrawals for a first home purchase are completely tax-free and do not have to be repaid. It truly offers the best of both worlds.
Simplify your practice with Atlas CSF+
Free trial — 2 questions, no credit card required. Free calculators, no sign-up needed.
Résumé en français :Guide complet sur le CELIAPP (Compte d'épargne libre d'impôt pour l'achat d'une première propriété) au Canada. Couvre l'admissibilité, les plafonds de cotisation (8 000 $/an, 40 000 $ à vie), l'interaction avec le RAP, le transfert au REER et les stratégies pour premiers acheteurs.