The FHSA gives you the best of both worlds: RRSP-style tax deductions when you contribute, AND TFSA-style tax-free withdrawals when you buy your first home. No other Canadian account does both.
Maya opens an FHSA in 2026 to build a home deposit. Opened since April 2023, the FHSA allows first-time buyers to save up to $8,000/year ($40,000 lifetime) in a registered account. Contributions are tax-deductible (like RRSP), investment growth is tax-free, and qualifying withdrawals for a home purchase are completely tax-free (like TFSA).
The numbers for 2026
- Annual contribution limit: $8,000
- Lifetime contribution limit: $40,000
- Unused room carries forward: up to $8,000/year (max $16,000 contribution in a single year with carry-forward)
- Must be used within 15 years of opening (or by December 31 of the year you turn 71)
- Qualifying home: any home in Canada that you intend to live in within 1 year
Why it beats RRSP alone
With RRSP's Home Buyers' Plan (HBP), you can withdraw $60,000 tax-free but you must REPAY it over 15 years. With FHSA, you withdraw tax-free and NEVER repay. The money is gone from the account forever, no strings attached.
Combined power play
You can use BOTH an FHSA (up to $40K lifetime contributions plus any qualifying investment growth, no repayment) AND the HBP ($60K tax-free from RRSP, repay over 15 years) for the same home purchase. That is $100,000 of contribution/withdrawal limits per qualifying person before FHSA growth, or $200,000 for two qualifying partners, subject to each plan’s rules.
If you never buy
If you do not use the FHSA for a home within 15 years, you can transfer the balance directly to your own RRSP or RRIF without immediate tax and generally without using RRSP deduction room, if the transfer conditions are met or withdraw it (taxed as income). Not ideal, but not a disaster.
CRA direct-transfer guidance distinguishes a qualifying direct FHSA-to-RRSP/RRIF transfer from taking a taxable withdrawal and then making a new RRSP contribution. The latter can use RRSP room; the former generally does not.
