A First Home Savings Account does something no other registered account does: you deduct the contribution like an RRSP, and you take the money out tax-free like a TFSA. $8,000 a year, $40,000 in a lifetime, and it only works if you buy.
The short answer
- $8,000 a year, $40,000 lifetime.
- Unused room carries forward, capped at $8,000, so $16,000 is the most in any one year.
- Contributions are deductible. RRSP transfers into it are not.
- A qualifying withdrawal is entirely tax-free, with nothing to repay.
- If you never buy, transfer it to an RRSP or RRIF. Direct transfer only.
- You can use it alongside the Home Buyers’ Plan for the same home.
How much you can actually put in
The room in the year you open your first FHSA is $8,000. Unused room carries forward, but only one year’s worth: the carry-forward is capped at $8,000. So the maximum in any single year is $16,000, and skipping three years does not let you put in $32,000 in the fourth.
| Amount | |
|---|---|
| Room in the first year | $8,000 |
| Maximum carry-forward | $8,000 |
| Most you can put in during one year | $16,000 |
| Lifetime limit | $40,000 |
Two things catch people. The room covers contributions and transfers from an RRSP combined, so moving $8,000 across from an RRSP uses the entire year. And the room applies across all your FHSAs together, so opening a second account at another bank does not create a second allowance.
Going over costs 1% per month on the highest excess amount in that month.
The deduction, and the trap inside it
Contributions are deductible against your income for the year you make them or a future year, in the same way as RRSP contributions. Carrying the deduction forward to a higher-income year is a legitimate and often better play.
Transfers from an RRSP into an FHSA are not deductible. You already had the deduction when the money went into the RRSP. The transfer moves money into a more flexible account, it does not generate a second deduction, and it consumes participation room that a fresh contribution could have used.
Taking the money out
A qualifying withdrawal comes out entirely tax-free, with no repayment and no minimum holding period. There is no equivalent of the Home Buyers’ Plan’s fifteen years of repayments.
All of the conditions have to be met, and the two that trip people up are timing ones: you need a written agreement to buy or build a qualifying home with completion before 1 October of the year following the withdrawal, and you must not have acquired the home more than 30 days before the withdrawal. Withdrawing the money a month after closing is too late.
If you never buy
The money is not stranded. You can transfer it to an RRSP or a RRIF with no immediate tax, and that transfer does not use your RRSP deduction room, which makes it effectively extra RRSP space.
It has to be a direct transfer. Withdraw the money yourself and put it into an RRSP afterwards and the CRA treats the withdrawal as taxable and the redeposit as a new RRSP contribution, which uses room you may not have and can create an over-contribution.
When it has to close
An FHSA is not open-ended. The participation period ends on 31 December of the year in which the earliest of these happens:
| Trigger | What it means |
|---|---|
| The 15th anniversary | Fifteen years after you opened your first FHSA |
| You turn 71 | The year of your 71st birthday |
| The year after your first qualifying withdrawal | Buying starts a clock on any money left behind |
The CRA’s own advice is to close all of your FHSAs before that period ends, to avoid unintended tax consequences. The third trigger is the one people miss: taking a qualifying withdrawal does not just empty the account, it starts the clock on whatever stays in it.
Using it with the Home Buyers’ Plan
You can do both for the same home. The CRA states that you may withdraw under the Home Buyers’ Plan and make a qualifying FHSA withdrawal for the same qualifying home, provided you meet the conditions at the time of each withdrawal. The HBP limit is $60,000, and unlike the FHSA it has to be repaid over fifteen years.
The FHSA is not the first-time home buyers’ credit
These get confused constantly, and they are unrelated.
| FHSA | Home buyers’ amount (line 31270) | |
|---|---|---|
| What it is | An account you save in | A credit you claim on your return |
| When | Before you buy | After you buy |
| What you get | A deduction going in, tax-free coming out | A non-refundable credit |
| Amount | $40,000 lifetime | Up to $10,000 claimed |
| First-time test | No disability exception | Waived if you qualify for the disability tax credit |
There is more on the credit, including how it is actually valued, in our page on the home buyers’ amount.
Common questions
How much can you put in an FHSA?
$8,000 in the year you open your first one. Unused room carries forward, but the carry-forward is capped at $8,000, so the most you can put in during any single year is $16,000. The lifetime limit is $40,000.
Is an FHSA better than an RRSP or a TFSA?
It does both jobs at once, which is what makes it unusual. Contributions are deductible like an RRSP, and a qualifying withdrawal comes out entirely tax-free like a TFSA. Neither of the other two does both.
What if I never buy a home?
You can transfer the money to an RRSP or a RRIF with no immediate tax, and it does not use RRSP room. It has to be a DIRECT transfer. If you withdraw it and then contribute it yourself, the withdrawal is taxable and the redeposit counts as a new RRSP contribution against your room.
When does an FHSA have to close?
At 31 December of the year the earliest of three things happens: the 15th anniversary of opening your first FHSA, you turn 71, or the year after your first qualifying withdrawal. The CRA advises closing all of your FHSAs before that period ends.
Can I use an FHSA and the Home Buyers’ Plan for the same home?
Yes. The CRA states that you can withdraw under the Home Buyers’ Plan and make a qualifying FHSA withdrawal for the same qualifying home, as long as you meet the conditions at the time of each withdrawal. The HBP limit is $60,000.
Are transfers from my RRSP into an FHSA deductible?
No. Contributions are deductible, transfers from an RRSP are not, and both count against the same participation room. Moving $8,000 across from an RRSP uses your whole year’s room and produces no deduction.
Is the FHSA the same as the first-time home buyers’ tax credit?
No, and this is the most common mix-up. The FHSA is an account you save in before you buy. The home buyers’ amount on line 31270 is a credit you claim on your return after you buy. They are unrelated mechanisms with different first-time buyer tests.
Can I open more than one FHSA?
Yes, but the participation room applies across all of them together, not to each one. Two accounts do not give you two lots of $8,000.
Worth getting the order right
Whether to contribute, transfer from an RRSP, or claim the deduction this year or a later one depends on your income now against your income when you buy. Offices in Abbotsford, Langley and Brampton.
Sources: CRA, First Home Savings Account, Tax deductions for FHSA contributions, Withdrawals and transfers out of your FHSAs, Closing your FHSAs and The Home Buyers’ Plan. Checked 12 August 2026. General information only, not advice for your situation.