The First Home Savings Account (FHSA) is a registered account built for one purpose: helping first-time buyers save for a home in Canada. It pairs an RRSP-style deduction on the way in with a tax-free withdrawal on the way out, as long as the withdrawal meets CRA’s qualifying rules. If you never buy, the balance can move to an RRSP or RRIF without tax. This page is the overview; each section links to the page in the FHSA guides directory that covers the topic in full.
How the FHSA works
| Feature | Rule |
|---|---|
| Participation room | $8,000 a year, from the year you open your first FHSA |
| Lifetime limit | $40,000 of contributions |
| Unused room | Carries forward, capped at $8,000 |
| Contributions | Deductible from income, in the year made or a later year |
| Growth inside the account | Not taxed |
| Qualifying withdrawal for a first home | Tax-free and never repaid |
| Taxable withdrawal | Included in income; the part that did not reduce an over-contribution comes back as room the following year |
| If you never buy | Transfer to an RRSP or RRIF without tax, or withdraw as taxable income |
| How long it can stay open | Until December 31 of the year of the earliest of: the 15th anniversary of opening your first FHSA, the year you turn 71, or the year after your first qualifying withdrawal |
The account sits alongside a TFSA and an RRSP rather than replacing either one. For how the three compare and which to fund first, see FHSA vs TFSA vs RRSP. For whether it is worth opening at all, see is an FHSA worth opening.
Who can open an FHSA
CRA calls an eligible person a “qualifying individual”. You must:
- be a resident of Canada;
- be at least 18 (19 in British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Yukon, Nunavut, Northwest Territories, where that is the age at which you can sign a contract), and no older than 71 at December 31 of the year you open the account;
- be a first-time home buyer: you did not live in a home you owned or jointly owned as your principal residence this year or in the previous 4 calendar years (a home outside Canada counts too), and, if you have a spouse or common-law partner when you open the account, you did not live in a home they owned in that period.
The spouse part of the test applies only when you open the account. The qualifying home and first-time buyer rules page walks through the test with examples, and opening an FHSA when your partner owns a home covers the partner scenarios. Timing and the age limits are on when to open an FHSA.
Contributions and room
Your room is $8,000 in the year you open your first FHSA and each later year, up to the $40,000 lifetime limit. Nothing accrues before the account exists, which is the main reason timing matters.
- Limits and over-contributions: the FHSA contribution limit page covers the limits, the 1% monthly tax on an excess, and how to check your room.
- Unused room: it carries forward, capped at $8,000, so the most you can put in during one year is $16,000, plus any re-participation room from an earlier taxable withdrawal. The FHSA carry-forward rules work through examples.
- More than one account: you can hold FHSAs at more than one institution. Every limit applies to your contributions across all of them combined.
- Transfers from an RRSP: you can move money directly from an RRSP into an FHSA. CRA’s participation-room formula counts those transfers the same way as contributions, so they use FHSA room, but a transfer from an RRSP can’t be claimed as an FHSA deduction.
- Only the holder contributes to their own FHSA. There is no spousal version of the account; each partner opens and funds their own, as covered in the FHSA for couples.
The tax deduction
FHSA contributions reduce your taxable income the same way RRSP contributions do. The saving depends on your marginal rate:
| Marginal tax rate | Tax saved on a $8,000 contribution |
|---|---|
| 20% | $1,600 |
| 30% | $2,400 |
| 40% | $3,200 |
| 50% | $4,000 |
You do not have to claim the deduction in the year you contribute. Carrying it to a higher-income year can raise its value; the first-60-days rule and the FHSA explains which year a contribution counts for and how deferring the deduction works. To see the deduction and growth together, use the FHSA calculator.
Investing inside the FHSA
An FHSA holds the same kinds of qualified investments as a TFSA or RRSP: savings deposits, GICs, bonds, mutual funds, ETFs and listed stocks. Because the money usually has a target date, many holders match the mix to how far away the purchase is. The FHSA investment options page lists what is and isn’t allowed and sets out allocations by timeline, and best FHSA accounts compares providers.
Taking money out
Qualifying withdrawal. To withdraw tax-free you need a written agreement to buy or build a qualifying home, you must still be a first-time buyer at the time of the withdrawal, you must be a Canadian resident, you must intend to live in the home within a year, and you file Form RC725 with your issuer. There is no minimum holding period. The full conditions and steps are on FHSA withdrawal rules.
Taxable withdrawal. Anything else is included in your income for the year and has tax withheld at source. The portion that did not fix an over-contribution comes back as re-participation room the following year. See withdrawing from an FHSA not for a home.
Never buying. You can transfer the balance directly to an RRSP or RRIF without tax and without using RRSP room, up to the end of the account’s maximum participation period. The options and deadline are on what happens to your FHSA if you never buy.
With the Home Buyers’ Plan. A qualifying FHSA withdrawal and an HBP withdrawal of up to $60,000 from your RRSP can go toward the same home. The differences and the combined amounts are on FHSA vs the HBP, and using both.
Reporting the FHSA on your tax return
| When | What happens |
|---|---|
| Year you open your first FHSA | You file Schedule 15 - FHSA Contributions, Transfers and Activities with your return, even if you contributed nothing |
| Any year you contribute | Your issuer sends a T4FHSA slip; you report contributions on Schedule 15 and claim the deduction you choose to use on line 20805 |
| Qualifying withdrawal | Reported on the T4FHSA slip and Schedule 15; not included in income |
| Taxable withdrawal | Included in income on line 12905; the tax withheld is credited against what you owe |
What each box on the slip means is covered in the T4FHSA slip explained.
The FHSA in Quebec (CELIAPP)
In French the account is the CELIAPP (compte d’épargne libre d’impôt pour l’achat d’une première propriété). The federal rules are the same everywhere in Canada. Quebec residents also deduct their contributions on their provincial return, at line 215 of the Quebec return, matching the federal line 20805 amount, and receive a Relevé 32 from their issuer.
Common FHSA mistakes
| Mistake | Why it matters |
|---|---|
| Waiting to open the account | Room only starts in the year you open your first FHSA. See when to open an FHSA. |
| Contributing more than your room | The excess is taxed at 1% a month with no buffer. |
| Withdrawing before the conditions are met | A withdrawal without a written agreement, or after the first-time buyer status is lost, is taxable. |
| Cashing out instead of transferring | If you don’t buy, a direct transfer to an RRSP avoids the tax a cash withdrawal triggers. |
| Leaving the balance past the deadline | Anything still in the account after the maximum participation period ends is taxable income. |
| Holding a mix that doesn’t fit the timeline | A market drop just before closing can shrink a down payment; cash held for a decade forgoes growth. |