What is the FHSA contribution limit for 2026?

The annual FHSA contribution limit is $8,000, with a lifetime limit of $40,000 per person. Unused room from a prior year carries forward up to a maximum of $8,000, so the most you can contribute in any single calendar year is $16,000 if you opened the account but skipped the prior year. Contribution room only starts accumulating once you open an FHSA - it does not back-date to age 18.

Who is eligible to open an FHSA?

You must be a Canadian resident, at least 18 years old (or the age of majority in your province if higher), and a first-time home buyer - meaning neither you nor your spouse owned a qualifying home you lived in as a principal residence in the current calendar year or the previous four years.

Are FHSA contributions tax-deductible?

Yes. FHSA contributions reduce your taxable income exactly like RRSP contributions, with the same combined federal + provincial deduction value (15-54% depending on your bracket). Unlike the RRSP, you can also carry forward the deduction itself - contribute now and claim the deduction in a future year when your income is higher.

Are FHSA withdrawals taxed?

Qualifying withdrawals to buy your first home are completely tax-free - both the contributions and the investment growth. Non-qualifying withdrawals (used for anything other than a first home) are added to your income and taxed at your marginal rate, with withholding tax applied at the time of withdrawal.

How long can you keep an FHSA open?

You can keep an FHSA for up to 15 years from when you first opened it, or until December 31 of the year you turn 71, or until December 31 of the year following your first qualifying withdrawal - whichever comes first. If you don't buy a home, you can transfer the full balance into your RRSP without using RRSP room.

Can I have both an FHSA and an RRSP?

Yes, and combining them is the optimal strategy for most first-time buyers. The FHSA has its own contribution room separate from your RRSP. You can also use the RRSP Home Buyers' Plan (up to $60,000 since April 16, 2024) on the same home purchase as your FHSA - for a combined first-home pool of up to $100,000 from registered accounts.

What investments can I hold in an FHSA?

An FHSA can hold the same investments as a TFSA or RRSP: cash, GICs, mutual funds, ETFs, individual stocks, and bonds. For a 1-3 year horizon (most first-time buyers), a high-interest savings ETF or GIC is generally appropriate; for 5+ year horizons a balanced or all-equity ETF (XBAL, XGRO, XEQT) becomes reasonable.

Where should I open my FHSA?

FHSA accounts are available at every major Canadian bank, credit union, and discount brokerage. For self-directed FHSAs (where you pick your own investments) Wealthsimple and Questrade are the leading low-cost options. For a managed FHSA, EQ Bank offers a HISA-style FHSA at competitive rates.

What is the FHSA contribution limit for 2026?

The annual FHSA contribution limit is $8,000, with a lifetime limit of $40,000 per person. Unused room from a prior year carries forward up to a maximum of $8,000, so the most you can contribute in any single calendar year is $16,000 if you opened the account but skipped the prior year. Contribution room only starts accumulating once you open an FHSA - it does not back-date to age 18.

Who is eligible to open an FHSA?

You must be a Canadian resident, at least 18 years old (or the age of majority in your province if higher), and a first-time home buyer - meaning neither you nor your spouse owned a qualifying home you lived in as a principal residence in the current calendar year or the previous four years.

Are FHSA contributions tax-deductible?

Yes. FHSA contributions reduce your taxable income exactly like RRSP contributions, with the same combined federal + provincial deduction value (15-54% depending on your bracket). Unlike the RRSP, you can also carry forward the deduction itself - contribute now and claim the deduction in a future year when your income is higher.

Are FHSA withdrawals taxed?

Qualifying withdrawals to buy your first home are completely tax-free - both the contributions and the investment growth. Non-qualifying withdrawals (used for anything other than a first home) are added to your income and taxed at your marginal rate, with withholding tax applied at the time of withdrawal.

How long can you keep an FHSA open?

You can keep an FHSA for up to 15 years from when you first opened it, or until December 31 of the year you turn 71, or until December 31 of the year following your first qualifying withdrawal - whichever comes first. If you don't buy a home, you can transfer the full balance into your RRSP without using RRSP room.

Can I have both an FHSA and an RRSP?

Yes, and combining them is the optimal strategy for most first-time buyers. The FHSA has its own contribution room separate from your RRSP. You can also use the RRSP Home Buyers' Plan (up to $60,000 since April 16, 2024) on the same home purchase as your FHSA - for a combined first-home pool of up to $100,000 from registered accounts.

What investments can I hold in an FHSA?

An FHSA can hold the same investments as a TFSA or RRSP: cash, GICs, mutual funds, ETFs, individual stocks, and bonds. For a 1-3 year horizon (most first-time buyers), a high-interest savings ETF or GIC is generally appropriate; for 5+ year horizons a balanced or all-equity ETF (XBAL, XGRO, XEQT) becomes reasonable.

Where should I open my FHSA?

FHSA accounts are available at every major Canadian bank, credit union, and discount brokerage. For self-directed FHSAs (where you pick your own investments) Wealthsimple and Questrade are the leading low-cost options. For a managed FHSA, EQ Bank offers a HISA-style FHSA at competitive rates.

First Home Savings Account

FHSA - Complete Canadian Guide for 2026

By MyMoneyMap Founder · Last updated 2026-04-26 · Reviewed against CRA First Home Savings Account

What an FHSA is (and what it isn’t)

The First Home Savings Account is a registered account introduced by the Government of Canada on April 1, 2023, designed specifically to help Canadians save for the down payment on a first home. It stacks the two best features of the Canadian registered-account system: contributions reduce your taxable income today (like an RRSP), and qualifying withdrawals come out tax-free (like a TFSA).

FHSAFirst Home Savings Account: A registered Canadian savings account introduced April 1, 2023. $8,000 annual / $40,000 lifetime contribution limit. Contributions are tax-deductible; qualifying first-home withdrawals are tax-free. Account must be closed within 15 years of opening, by age 71, or within one year of the first qualifying withdrawal - whichever is first.

The FHSA is not a high-interest savings account by default - that’s just the nickname some banks use. The FHSA is the registered wrapper; what you hold inside it (cash, GICs, ETFs, stocks) is up to you and depends on your time horizon to home purchase. See What to invest the FHSA in.

Eligibility - who can open one

To open an FHSA you must:

Be a Canadian resident
Be at least 18 (or the age of majority in your province - 19 in BC, NB, NS, NL, NT, NU, YT)
Be a first-time home buyer, meaning neither you nor your spouse owned a qualifying home you lived in as your principal residence in the current calendar year or the previous four years

The four-year rule is the one that catches people. If you owned a home jointly in 2021 and sold it in 2022, you’re not eligible until 2027 (the calendar year of 2022 plus four full years).

Contribution limits, carry-forward, and the $40,000 cap

The FHSA has two limits stacked: an annual contribution limit and a lifetime cap.

FHSA contribution mechanics at a glance

Mechanic	Limit	Notes
Annual contribution	$8,000	From the year you open the account, not from age 18.
Lifetime contribution	$40,000	Hard cap. Once hit, you cannot contribute more even if you withdraw.
Carry-forward of unused room	Max $8,000	Skipping one year lets you contribute up to $16,000 the next. Skipping two years still caps at $16,000.
Over-contribution penalty	1% per month	Same mechanic as TFSA over-contribution. Withdraw immediately if you exceed the cap.
Spousal contributions	Not allowed	Each spouse must contribute to their own FHSA from their own funds - though gifts of cash are fine.

Source: CRA First Home Savings Account guidelines (canada.ca).

$40,000

Maximum lifetime contribution per person to an FHSA - and zero of the eventual investment growth or qualifying withdrawal is ever taxed.

Source: CRA - FHSA · 2026

How the FHSA is taxed (and not taxed)

The FHSA is the most tax-efficient registered account Canada has ever introduced for a first-time home buyer, because both directions of the cash flow get a tax break:

Going in: Every dollar contributed is deductible against your taxable income for the year. At a 30% combined federal+provincial marginal rate, an $8,000 contribution gives you a roughly $2,400 tax refund.
Growing: Investment growth (interest, dividends, capital gains) is sheltered from tax - like a TFSA.
Coming out (qualifying): When you withdraw to buy a first home, the entire balance comes out tax-free. The government never gets a claim on the contributions or the growth.
Coming out (non-qualifying): If you withdraw for anything else, the amount is added to your income for the year and taxed at your marginal rate, with withholding tax taken at source. This is the same treatment as an RRSP non-HBP withdrawal.

Critically, the deduction itself can also be carried forward to a future year. Contribute in a year your marginal rate is 25%, claim the deduction in a year your rate is 33%, and you have effectively arbitraged 8 percentage points of tax purely through timing. This is one of the few legitimately exploitable timing plays in the Canadian system.

FHSA vs RRSP vs TFSA - quick comparison

Three Canadian registered accounts, three different jobs. The FHSA beats both for the specific use case of saving for a first home.

FHSA vs RRSP vs TFSA - for first-home saving

Feature	FHSA	RRSP	TFSA
Annual room	$8,000	18% of prior earned income (max $33,810 in 2026)	$7,000 (2024-2026)
Lifetime cap	$40,000	No cap	Cumulative since age 18
Tax deduction on contribution	Yes - same as RRSP	Yes	No
Tax-free growth	Yes	Tax-deferred (taxed on withdrawal)	Yes
Tax on first-home withdrawal	$0 (qualifying)	$0 via HBP - but must repay over 15 years	$0 - no repayment, no qualification
Carry-forward of room	Up to $8,000	Indefinite	Indefinite
Can roll into RRSP if unused	Yes - without using RRSP room	n/a	n/a
Best for	First home (only use case)	Long-term retirement, high-income years	Anything not already covered by FHSA / RRSP

Source: CRA - TFSA, RRSP, and FHSA program documents (canada.ca, 2026).

For a deeper head-to-head: FHSA vs RRSP for first home buyers and FHSA vs TFSA - which one should you fund first?

Combining with the RRSP Home Buyers’ Plan

The FHSA does not replace the RRSP Home Buyers’ Plan (HBP) - you can use both on the same home purchase. Since April 16, 2024, the federal government raised the HBP withdrawal limit from $35,000 to $60,000, which means a single first-time buyer can access up to $100,000 of registered first-home funds: $40,000 from a fully-funded FHSA plus $60,000 via the HBP. A couple buying together can stack to $200,000.

$100,000

Maximum first-home registered funds available to a single buyer who fully funds an FHSA and maxes the RRSP Home Buyers' Plan.

Source: Government of Canada Budget 2024 - HBP increase · 2026

Read the full step-by-step: Combining the FHSA with the RRSP Home Buyers’ Plan.

What to invest the FHSA in

Match the holdings to your time horizon to home purchase. The tax-shelter benefit of the FHSA is worth more on growth than on cash interest - but only if you don’t need the money in 12 months.

0-2 years from purchase: High-interest savings ETF (CASH.TO, PSA, HSAV) or a short-term GIC. Yield is the only concern; volatility is unacceptable when you need the down payment soon.
2-4 years: A conservative balanced ETF (XBAL, VBAL, ZBAL - all 60/40 stock/bond) gives you a chance at higher returns with manageable downside. Still some risk of a 5-10% drawdown at the wrong time.
5+ years: A balanced or growth ETF (XGRO 80/20, VGRO 80/20, ZGRO 80/20) or an all-equity ETF (XEQT, VEQT, ZEQT) if you can ride out a full market cycle. Maximum tax-shelter value comes from this scenario, but only if you genuinely have the time horizon.

Where to open an FHSA

FHSAs are available at every major Canadian bank, credit union, and discount brokerage. The choice comes down to whether you want self-directed (you pick the investments) or managed (they pick).

Self-directed, low-cost: Wealthsimple Trade (no commissions) or Questrade (no commissions on ETF buys). Lets you hold any TSX/NYSE-listed ETF, including the all-in-one ETFs above.
HISA-style FHSA: EQ Bank (currently among the highest interest rates), Wealthsimple Cash, or Oaken Financial. Best for sub-2-year horizons where you just want safe yield.
Big Five FHSA: RBC, TD, BMO, Scotiabank, CIBC all offer FHSAs but typically with bank-branded mutual funds carrying 1.8-2.5% MERs. Avoid unless you’re bundling with an existing newcomer banking package and plan to switch later.

Common FHSA mistakes

Opening too early. Contribution room only starts when you open the account - not when you turn 18. If you definitely won’t buy for 5+ years, opening now to start the room clock is fine. If you might buy in 18 months, don’t open until you have the cash to fund it.
Treating it like a chequing account. Frequent contributions and withdrawals trigger over-contribution penalties if mistimed, and non-qualifying withdrawals are fully taxable. Set it up, fund it, leave it alone.
Holding cash with a 5-year horizon. The HISA version is convenient but inflation eats most of the gain. With a 5+ year horizon, an ETF compounds tax-free inside the FHSA and the difference is enormous.
Forgetting the 15-year clock. If you don’t buy a home, transfer the balance to your RRSP before the 15-year deadline (or by Dec 31 of the year you turn 71). Miss it and the account collapses with full taxation.
Not stacking with the HBP. Some buyers think the FHSA replaces the HBP. It doesn’t - they stack. Using only one is leaving up to $60,000 of additional registered funds on the table.

Go deeper

FHSA contribution limit 2026

$8,000 annual, $40,000 lifetime, carry-forward rules, and what happens if you over-contribute.

Read the guide →

FHSA vs RRSP for first-home buyers

The same tax deduction, very different downstream consequences. When each one wins.

Read the guide →

FHSA vs TFSA - which to fund first

Both are tax-free out, but only one is also tax-deductible in. The decision depends on your timeline and tax bracket.

Read the guide →

FHSA + RRSP HBP combined strategy

Stack both for up to $100,000 of registered first-home funds per buyer, $200,000 per couple.

Read the guide →

Frequently asked questions

What is the FHSA contribution limit for 2026?: The annual FHSA contribution limit is $8,000, with a lifetime limit of $40,000 per person. Unused room from a prior year carries forward up to a maximum of $8,000, so the most you can contribute in any single calendar year is $16,000 if you opened the account but skipped the prior year. Contribution room only starts accumulating once you open an FHSA - it does not back-date to age 18.
Who is eligible to open an FHSA?: You must be a Canadian resident, at least 18 years old (or the age of majority in your province if higher), and a first-time home buyer - meaning neither you nor your spouse owned a qualifying home you lived in as a principal residence in the current calendar year or the previous four years.
Are FHSA contributions tax-deductible?: Yes. FHSA contributions reduce your taxable income exactly like RRSP contributions, with the same combined federal + provincial deduction value (15-54% depending on your bracket). Unlike the RRSP, you can also carry forward the deduction itself - contribute now and claim the deduction in a future year when your income is higher.
Are FHSA withdrawals taxed?: Qualifying withdrawals to buy your first home are completely tax-free - both the contributions and the investment growth. Non-qualifying withdrawals (used for anything other than a first home) are added to your income and taxed at your marginal rate, with withholding tax applied at the time of withdrawal.
How long can you keep an FHSA open?: You can keep an FHSA for up to 15 years from when you first opened it, or until December 31 of the year you turn 71, or until December 31 of the year following your first qualifying withdrawal - whichever comes first. If you don't buy a home, you can transfer the full balance into your RRSP without using RRSP room.
Can I have both an FHSA and an RRSP?: Yes, and combining them is the optimal strategy for most first-time buyers. The FHSA has its own contribution room separate from your RRSP. You can also use the RRSP Home Buyers' Plan (up to $60,000 since April 16, 2024) on the same home purchase as your FHSA - for a combined first-home pool of up to $100,000 from registered accounts.
What investments can I hold in an FHSA?: An FHSA can hold the same investments as a TFSA or RRSP: cash, GICs, mutual funds, ETFs, individual stocks, and bonds. For a 1-3 year horizon (most first-time buyers), a high-interest savings ETF or GIC is generally appropriate; for 5+ year horizons a balanced or all-equity ETF (XBAL, XGRO, XEQT) becomes reasonable.
Where should I open my FHSA?: FHSA accounts are available at every major Canadian bank, credit union, and discount brokerage. For self-directed FHSAs (where you pick your own investments) Wealthsimple and Questrade are the leading low-cost options. For a managed FHSA, EQ Bank offers a HISA-style FHSA at competitive rates.

Educational content only - not personalised financial, tax, or legal advice. For situations specific to you, consult a CFP (FP Canada) or CPA. See our Editorial Policy for sources and review process.