The First Home Savings Account lets Canadians save for a first home with a tax deduction on the way in and no tax on a qualifying withdrawal. The limits and the withdrawal conditions are specific, and mistakes are taxed.
This guide explains who can open an FHSA, how much room you have, what an excess costs and how to make a qualifying withdrawal, using Canada Revenue Agency pages read on 26 October 2026.
The CRA describes an FHSA as a registered plan that lets you, as a first-time home buyer, save to buy or build a qualifying first home tax-free, up to certain limits. Contributions to an FHSA are generally deductible and can reduce your tax; transfers from your RRSPs to your FHSAs are not deductible. Your participation room in the year you open your first FHSA is $8,000. The room applies to all of the FHSAs you open and to contributions and RRSP transfers combined: in the CRA example, a $7,500 transfer from an RRSP plus a $500 contribution uses the full $8,000.
| Condition | CRA rule |
|---|---|
| Age | 18 or older (19 where that is the legal age to contract in your province or territory) and 71 or younger as of December 31 of the year you open |
| Residency | Resident of Canada |
| First-time home buyer | You did not live in a qualifying home you owned or jointly owned as your principal place of residence in this calendar year or the previous 4 calendar years, and the same for a home your spouse or common-law partner owned if you have one |
You must meet all conditions when you open the account. A qualifying home is a housing unit located in Canada, including existing homes and those being built. You cannot open an FHSA after the end of your maximum participation period.
After the first year, the CRA's formula for your participation room is the lesser of $8,000 plus your carryforward minus any excess FHSA amount, and a lifetime limit of $40,000 minus your contributions and RRSP transfers in prior years (with adjustments for designated amounts and certain withdrawals). Your CRA account shows your room. If you contribute or transfer more than your room you have an excess FHSA amount taxed at 1% per month on the highest excess in the month, and you report it on Form RC728 with Schedule A. In the CRA example, a $5,000 excess in December 2026 means a 2027 room of $3,000 ($8,000 less $5,000). Our illustration: leaving a $5,000 excess for one month costs 1% of $5,000, or $50.
| Qualifying withdrawal condition (CRA) | Detail |
|---|---|
| First-time home buyer at withdrawal | Did not live in a home you owned in the current year before the withdrawal (except the 30 days before) or the previous 4 calendar years |
| Written agreement | To buy or build a qualifying home, with acquisition or completion before October 1 of the year after the withdrawal |
| Timing | Not acquired more than 30 days before the withdrawal |
| Residence | Resident of Canada from your first qualifying withdrawal until you acquire the home; occupy or intend to occupy it as your principal residence within one year of buying or building it |
| Form | RC725 given to your FHSA issuer |
If you do not meet all the conditions, the withdrawal may be a taxable withdrawal included in income. After a qualifying withdrawal, close your FHSAs on or before December 31 of the year following the year of your first qualifying withdrawal. See our TFSA contribution limit guide for the other tax-free account, and our Canada expat tax guide if you may become a non-resident.
CRA: First Home Savings Account (FHSA), CRA: Participating in your FHSAs, CRA: Opening your FHSAs, CRA: Withdrawals and transfers out of your FHSAs.