The FHSA in 2026, from opening the account to closing it

Who can open one

The CRA sets four conditions on the day you open the account:

1. You are a resident of Canada.
2. You are at least 18 (or the age of majority in your province, which delays opening to 19 in some provinces).
3. You are no more than 71 on December 31 of that year.
4. You are a first-time home buyer: at no time in the current calendar year before opening, or in the previous four calendar years, did you live in a home as your principal residence that you owned or jointly owned, or that your spouse or common-law partner owned.

The fourth test trips people up in both directions. Owning a rental property you never lived in does not disqualify you. Living in a house your partner owns does, even if your name was never on the title. Our eligibility calculator asks exactly these questions.

Room: $8,000 a year, $40,000 for life

Each year you have an FHSA open you receive $8,000 of participation room, up to a lifetime total of $40,000. Unused room carries forward, but the carryforward that can be applied in any one year is capped at $8,000, so the most you can contribute in a single year is $16,000.

The most important detail: room only begins in the year you open your first FHSA. Someone who waits until 2028 to open an account has $8,000 of room in 2028, not the $8,000 × 6 that would have accrued since 2023. Opening an account with a nominal deposit as soon as you are eligible is the single most valuable move the plan allows.

Deducting contributions

FHSA contributions are deductible like RRSP contributions, but the deadline is December 31. There is no first-60-days rule. You may carry the deduction forward and claim it in a later year when your income is higher. Transfers from an RRSP into an FHSA use FHSA room but are not deductible again, because the RRSP contribution already was.

What makes a withdrawal tax-free

A qualifying withdrawal is tax-free when, at the time of withdrawal, you are a first-time home buyer under the same four-year test (with one relaxation: you may already have a written agreement to buy the home and have lived in it for up to 30 days), you are a resident of Canada, you have a written agreement to buy or build a qualifying home in Canada with a completion date before October 1 of the following year, and you intend to live in it as your principal residence within a year. You can withdraw the entire balance, growth included, in one or more qualifying withdrawals.

A withdrawal that does not meet the conditions is added to your income and taxed, exactly like an RRSP withdrawal.

When the account has to close

Your maximum participation period ends on December 31 of the earliest of:

• the 15th year after you opened your first FHSA,
• the year you turn 71, or
• the year after your first qualifying withdrawal.

Whatever is left can be transferred tax-free to an RRSP or RRIF, and the transfer does not use any RRSP room. Withdrawn as cash instead, it is taxed as income. Someone who never buys a home therefore ends up with an extra $40,000 plus growth of RRSP-like savings on top of their normal RRSP limit, which is why the FHSA is worth opening even if a purchase is uncertain.