Canada · FHSA

FHSA rules for Canadians: $8,000 a year, $40,000 lifetime (2026)

Last checked: October 29, 2026 · By AP Dult · AI-assisted

The First Home Savings Account (FHSA) is a registered plan for first-time home buyers. Contributions are generally deductible; qualifying withdrawals to buy or build a first home can be tax-free (within CRA limits). Here are the headline numbers from the CRA.

Who can open an FHSA

Per the CRA’s “Opening your FHSAs” page, you must be a qualifying individual when you open the account — all of these at once:

18 or older (and 71 or younger as of December 31 of the year you open); in some provinces the legal contracting age is 19.
a resident of Canada
a first-time home buyer as the CRA defines it for opening an FHSA (you did not live, in the current calendar year before opening or in the previous four calendar years, in a qualifying home as your principal residence that you or your spouse/common-law partner owned or jointly owned)

$8,000 participation room in year one

The CRA states: your FHSA participation room in the year you open your first FHSA is $8,000.

That room applies to contributions and RRSP-to-FHSA transfers combined across all FHSAs you open. Transfers from an RRSP to an FHSA are not deductible (the CRA is explicit on this).

$40,000 lifetime limit

In CRA definitions, the lifetime FHSA limit = $40,000. That is generally the most you can contribute to your FHSAs or transfer from RRSPs to FHSAs over your lifetime. Over your lifetime, the most you can deduct as an FHSA deduction is also $40,000 (RRSP transfers reduce how much remains deductible).

Carryforward: up to $8,000 unused → up to $16,000 next year

Per the CRA’s “Participating in your FHSAs” page, FHSA participation room carryforward is the lesser of $8,000 and your unused participation room. So unused room can carry forward by up to $8,000.

CRA’s Wendy example: open an FHSA, contribute or transfer $0 in year one → the next year’s participation room statement shows $16,000 ($8,000 new annual room + $8,000 carryforward). That later-year room is still constrained by the $40,000 lifetime limit in the CRA’s participation-room calculation.

There is also a separate FHSA carryforward used for annual deduction limits — do not mix the two. After you file Schedule 15 for the year you open the account, the CRA shows participation room on your notice of assessment / CRA account.

Qualifying withdrawals (one line)

A qualifying withdrawal to buy or build a qualifying first home in Canada can be tax-free if you meet all of the CRA’s conditions (first-time home buyer for withdrawal purposes, written agreement, residency, Form RC725 to your issuer, and the other tests on the CRA withdrawals page). Other withdrawals are generally taxable.

When participation ends

The CRA says your maximum participation period begins when you open your first FHSA and ends on December 31 of the year in which the earliest of these occurs:

the 15th anniversary of opening your first FHSA
the year you turn 71
the year following your first qualifying withdrawal

Close all FHSAs before that date (transfer to an RRSP/RRIF or withdraw) to avoid unintended tax — see the CRA’s closing page linked below.

Excess FHSA amounts

Contribute or transfer more than your participation room and you can create an excess FHSA amount. The CRA’s examples show a tax of 1% per month on the highest excess in each month, reported on Form RC728 and Schedule A — similar in spirit to the TFSA excess tax. Resolve excesses promptly using CRA designation / withdrawal rules.

What it means for you

Confirm you meet CRA eligibility before you open — especially the first-time home buyer test.
Year-one ceiling is $8,000 total for cash contributions plus RRSP transfers — not $8,000 of each.
If you use $0 of year-one room, next year can show $16,000 participation room; lifetime still $40,000.
Track the participation clock (15 years / age 71 / year after first qualifying withdrawal).

FAQ

How much can I put in an FHSA in the first year?

$8,000 participation room when you open your first FHSA (CRA). Applies to contributions and RRSP-to-FHSA transfers combined.

What is the FHSA lifetime limit?

$40,000 (CRA definition).

Can unused FHSA participation room carry forward?

Yes. Carryforward is up to $8,000 of unused room, so a later year can show up to $16,000 participation room, still within the $40,000 lifetime limit (CRA Wendy example).

Who can open an FHSA?

18+, Canadian resident, and a first-time home buyer as the CRA defines it for opening (also 71 or younger as of Dec 31 of the opening year).

When does FHSA participation end?

December 31 of the earliest of: 15th anniversary of first FHSA, year you turn 71, or the year following your first qualifying withdrawal.

Sources

Canada Revenue Agency, “Opening your FHSAs” (qualifying individual: age, residency, first-time home buyer): canada.ca …/opening-your-fhsas.html
Canada Revenue Agency, “First Home Savings Account (FHSA)” overview ($8,000 first-year room; deductible contributions; RRSP transfers not deductible): canada.ca …/first-home-savings-account.html
Canada Revenue Agency, “Participating in your FHSAs” (carryforward lesser of $8,000; Wendy $16,000 example; excess): canada.ca …/contributing-your-fhsa.html
Canada Revenue Agency, “Definitions for FHSAs” (lifetime FHSA limit = $40,000): canada.ca …/definitions.html
Canada Revenue Agency, “Withdrawals and transfers out of your FHSAs” (qualifying withdrawal conditions): canada.ca …/withdrawals-transfers-out-your-fhsas.html
Canada Revenue Agency, “Closing your FHSA” (maximum participation period): canada.ca …/closing-your-fhsa.html
Canada Revenue Agency, “Tax deductions for FHSA contributions” (lifetime deductible max $40,000): canada.ca …/tax-deductions-fhsa-contributions.html

Sources accessed Thu Oct 29, 2026.

General information and education only.

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