The First Home Savings Account (FHSA) is the most tax-advantaged way for Canadians to save for a first home. Contributions are tax-deductible, growth is tax-free, and withdrawals for a qualifying home purchase are also tax-free. This guide explains the 2026 rules and how to estimate your savings.
The FHSA Combines the Best of RRSP and TFSA
Contributions are tax-deductible, like an RRSP. Growth and qualifying withdrawals are tax-free, like a TFSA. For a first home, this is usually the most tax-efficient savings vehicle available to Canadians.
2026 FHSA Contribution Limits
The annual limit is $8,000 and the lifetime limit is $40,000. Unused annual room can be carried forward, but only up to $8,000 of prior room can be used in any single year once the account is open.
Tax Refunds Add Up Quickly
Someone in a 30% tax bracket contributing $8,000 per year gets an estimated $2,400 annual refund. Over five years that is $12,000 in tax savings that can be reinvested, on top of the account growth.
Worked Example: Five Years of Saving
Contributing $8,000 per year at a 6% annual return with a 30% marginal tax rate builds a balance near $48,000 after five years. The same contributions in a taxable account would lose roughly one-third of the growth to tax, depending on the province.
Who Qualifies and How to Withdraw
You must be a Canadian resident, 18 or older, and a first-time homebuyer. The home must be your principal residence and you must have a written agreement to buy within a year of withdrawal. Combine the FHSA with the Home Buyers’ Plan for more down payment power.
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Open FHSA Calculator CanadaFrequently Asked Questions
What is the FHSA contribution limit?
For 2026, the annual FHSA contribution limit is $8,000 and the lifetime limit is $40,000. You can carry forward unused room from prior years, up to $8,000, once the account is open.
Is an FHSA better than an RRSP or TFSA?
An FHSA combines the best of both: contributions are tax-deductible like an RRSP, and qualifying withdrawals are tax-free like a TFSA. For a first home, it is usually the most efficient account.
Who qualifies for an FHSA?
You must be a Canadian resident, at least 18 years old, and a first-time homebuyer — meaning you did not own a home in the current year or the previous four calendar years.
Can I use FHSA money with the Home Buyers’ Plan?
Yes. You can combine a tax-free FHSA withdrawal with a Home Buyers’ Plan RRSP withdrawal, giving you more total capital for a down payment.
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