# FHSA Explained: First Home Savings Account Rules 2026 > How the First Home Savings Account works: $8,000 a year, $40,000 lifetime, a tax deduction going in and a tax-free withdrawal for your first home. Source: https://trykosh.com/learn/fhsa-explained Guide - RRSP, TFSA and FHSA # The FHSA explained: who qualifies, how much you can save and how to use it The First Home Savings Account is the best tax deal in Canadian personal finance for anyone buying a first home: contributions are deductible like an RRSP and qualifying withdrawals are tax-free like a TFSA. You can put in $8,000 a year, up to $40,000 in total. Updated October 31, 20264 min readBy the Kosh team On this page[What is an FHSA?](#what-is-an-fhsa)[Who can open an FHSA?](#eligibility)[How much can I put in?](#limits)[How big is the tax saving?](#tax-saving)[How to use it to buy a home](#withdrawal)[What if I never buy?](#if-you-dont-buy)[FHSA, RRSP or TFSA for a down payment?](#comparison)[FAQs](#faq) ## What is an FHSA? An FHSA is a registered account for saving toward a first home. It can hold the same investments as an RRSP or TFSA: cash, GICs, bonds, funds, ETFs and stocks. Its tax treatment takes the best of both: - **Contributions are deductible**, cutting your taxable income in the year you claim them. - **Growth is tax-free** while the money is inside. - **A qualifying withdrawal to buy a first home is tax-free.** Nothing is ever taxed on that money. ## Who can open an FHSA? - You're a resident of Canada. - You're at least 18 (in provinces where the age of majority is 19, the institution may require 19) and no older than 71 on December 31 of the year you open it. - You're a **first-time home buyer**: you haven't lived, at any time in this calendar year or the previous four, in a home that you owned or jointly owned as your principal residence. - If you have a spouse or common-law partner, they also didn't own a home you lived in as your principal residence during that period. Someone who sold a home more than four calendar years ago can qualify again. ## How much can I put in? The annual limit is **$8,000** and the lifetime limit is **$40,000**. Room only starts building once you open an account, so open one as soon as you think you might buy, even with a small deposit. Unused room carries forward, but only up to $8,000, so the most you can contribute in a single year is $16,000. Contributions count for the calendar year you make them. Unlike an RRSP, there's no 60-day grace period into the next year, so December 31 is the deadline. ## How big is the tax saving? It's the same as an RRSP deduction of the same size. Worked with 2026 rules, a full $8,000 contribution saves an Ontario employee earning $75,000 about $2,522 in tax, and one earning $120,000 about $3,011. Like the RRSP, you can carry the deduction forward to a year when your income and tax rate are higher. ## How to use it to buy a home To make a qualifying, tax-free withdrawal you must still be a first-time home buyer when you withdraw, have a written agreement to buy or build a home in Canada, and intend to live in it as your principal residence. You fill in a form with your FHSA issuer, who releases the money without withholding tax. You can use both the FHSA and the [Home Buyers' Plan](/learn/home-buyers-plan) for the same home, which is how couples stack up a large down payment. ## What if I never buy? An FHSA can stay open until December 31 of the earliest of: the 15th anniversary of opening your first FHSA, the year you turn 71, or the year after your first qualifying withdrawal. Before then you can transfer the balance to your RRSP or RRIF tax-free, and that transfer doesn't use any RRSP room. Or you can withdraw it as taxable income. That's why there's little downside to opening one early: if plans change, the money ends up in your RRSP with the deduction already claimed. If the account is still open when the period ends, the whole balance is added to your income. ## FHSA, RRSP or TFSA for a down payment? FHSA RRSP (Home Buyers' Plan) TFSA Deduction going in Yes Yes No Tax on withdrawal for a home None None, but you repay over 15 years None Limit $8,000 a year, $40,000 lifetime Up to $60,000 withdrawal $7,000 a year plus carried room Must repay No Yes No [Free tool**RRSP tax refund calculator**Find out how much tax an RRSP contribution saves you this year, and what it really costs once the refund comes back.](/tools/rrsp-calculator) **Where Kosh fits** Kosh notices when you're saving for a home and puts the FHSA first, then the Home Buyers' Plan and TFSA, with a reminder before December 31 so the year's room isn't lost. ## Frequently asked questions How much can I contribute to an FHSA? $8,000 a year and $40,000 in total. Up to $8,000 of unused room carries forward, so the most in one year is $16,000. Room starts only once you open an account. Who counts as a first-time home buyer for the FHSA? Someone who hasn't lived, in this calendar year or the previous four, in a home they or their spouse or common-law partner owned as a principal residence. Can I use the FHSA and the Home Buyers' Plan together? Yes. You can make a qualifying FHSA withdrawal and an HBP withdrawal for the same home, as long as you meet each program's conditions. What happens to my FHSA if I don't buy a home? You can transfer it to your RRSP or RRIF tax-free without using RRSP room, or withdraw it as taxable income. It must be closed by the end of the 15th year after opening, the year you turn 71, or the year after your first qualifying withdrawal, whichever comes first. Is the FHSA deadline December 31? Yes. Contributions count for the calendar year in which they're made, with no 60-day extension like the RRSP. ## Sources - [CRA: Opening your FHSAs](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/opening-your-fhsas.html) - [CRA: Closing your FHSA](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/closing-your-fhsa.html) - [CRA: Withdrawals and transfers out of your FHSAs](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/withdrawals-transfers-out-your-fhsas.html) Written by the Kosh team and checked against the rules in force on October 31, 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not registered with any Canadian securities regulator as an adviser or dealer, does not recommend specific securities, and does not hold your money or execute trades. Tax figures are estimates; confirm with the CRA or a qualified professional before acting. Investing carries risk. ## Upload your statement and Kosh does this for you. Kosh reads your bank, card and investment statements, estimates your federal and provincial tax and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-fhsa-explained)