FHSA Planner
How big a down payment can the First Home Savings Account build by your purchase year, and how much tax does Ottawa hand back along the way? 2026 rules: $8,000 a year, $40,000 lifetime, deductible going in and tax-free coming out.
Rates & rules verified · July 2026Primary sources: CRA – First Home Savings Account (FHSA) · CRA – Tax rates and income brackets
FHSA vs the same savings, taxed
Your tax-free balance against identical out-of-pocket savings in a taxable account, where growth is taxed as it happens.
Year-by-year plan
Contributions, refunds and balances. The highlighted row is where you max the $40,000 lifetime limit.
| Year | FHSA contribution | Tax refund | FHSA balance | Side TFSA | Taxable account |
|---|
How this is calculated
Contribution rules (2026)
The FHSA gives you $8,000 of participation room per year and a $40,000 lifetime limit. Crucially, room is based on your contributions and RRSP transfers only, income earned inside the FHSA (growth and capital gains) never uses room (CRA, Contributing to your FHSAs). So enter your true Contributions made so far in the optional field, leave it blank and the tool falls back to your current balance (which overstates used room if part of that balance is growth). Up to $8,000 of unused room carries forward, so a catch-up year can absorb $16,000, enter any Unused room carried forward to model it. Room starts the year you open your first FHSA (there's no accrual from age 18).
Growth and refunds
Each year's contribution is invested in 12 equal monthly parts, and the balance compounds at (1 + r)^(1/12) − 1 per month. Contributions are deductible, so each year generates a refund of contribution × marginal rate. By default the refund is treated as cash in your pocket, not new savings. Flip reinvest refunds and each refund is added to the following year's contribution, anything that doesn't fit under the $8,000 annual / $40,000 lifetime FHSA caps spills into a side TFSA at the same return. Reinvested FHSA dollars are themselves deductible, so they generate their own refunds. You can also carry the deduction forward and claim it in a higher-income year, this tool assumes you claim it right away at the rate you enter.
The taxable comparison (an approximation)
The dashed line puts the same out-of-pocket savings in an unregistered account earning r × (1 − 50% × marginal rate), that is, growth taxed each year at your capital-gains rate (50% inclusion, confirmed after the 2/3 proposal was cancelled in March 2025). Real taxable investing is messier: capital gains are deferred until you sell (less drag), while interest and foreign dividends are taxed at your full rate (more drag). Annualizing the drag is a deliberate middle-of-the-road simplification.
Who can open one, and the clock
You must be a Canadian resident, at least 18 (or the age of majority in your province) and at most 71, and a first-time buyer: you didn't live in a home that you or your spouse/common-law partner owned during the current calendar year or the previous four. The account must close by December 31 of the 15th year after opening, the year you turn 71, or the year after your first qualifying withdrawal, whichever comes first. Unused money rolls into your RRSP or RRIF tax-free without using any RRSP room.
Stacking with the Home Buyers' Plan
The FHSA stacks with the HBP: you can also withdraw up to $60,000 from your RRSP for the same first home. The difference: HBP money is a loan from your own retirement savings, repaid over 15 years starting the second year after withdrawal (missed repayments are added to your taxable income). FHSA qualifying withdrawals are never repaid.
Why the FHSA beats both RRSP-HBP and TFSA for a first home
It combines the best half of each: an RRSP-style deduction going in and a TFSA-style tax-free withdrawal coming out, with no repayment obligation. A TFSA gives no deduction; the RRSP-HBP must be paid back. For a first-home fund, fill the FHSA before either.
What this doesn't model
Deferring deductions to higher-income years, investment fees, return volatility, HBP repayments, the 1%/month over-contribution penalty, FHSA re-participation room after a taxable withdrawal, or Quebec's separate return (Quebec mirrors the federal FHSA treatment). Carry-forward is modelled only from the amount you enter, it isn't auto-accrued from years you under-contribute mid-projection. Once you know your down payment, run the mortgage calculator and the affordability calculator for the rest of the purchase.
Common questions
How much can I contribute to an FHSA in 2026?
You get $8,000 of participation room per year, plus up to $8,000 of unused room carried forward from earlier years (so at most $16,000 in one year), up to a $40,000 lifetime limit. Contributions are tax-deductible like an RRSP, and you can carry the deduction forward to a higher-income year.
Can I use both the FHSA and the Home Buyers' Plan for the same home?
Yes. You can make a tax-free FHSA qualifying withdrawal and also withdraw up to $60,000 from your RRSP under the Home Buyers' Plan for the same purchase. The HBP must be repaid over 15 years; FHSA withdrawals are never repaid.
Who counts as a first-time home buyer for the FHSA?
To open an FHSA you must be a Canadian resident aged 18 (or the age of majority in your province) to 71, and you must not have lived in a home that you or your spouse/common-law partner owned in the current calendar year or any of the previous four calendar years.
What happens to my FHSA if I never buy a home?
The account must close by December 31 of the 15th year after you opened it, or of the year you turn 71, whichever comes first. You can roll the full balance into your RRSP or RRIF tax-free, without using any RRSP contribution room, or withdraw it as taxable income.
Is the FHSA better than a TFSA or RRSP for a down payment?
For a first home, usually yes. FHSA contributions are deductible like an RRSP, growth and qualifying withdrawals are tax-free like a TFSA, and unlike the RRSP Home Buyers' Plan there is nothing to repay. Most first-time buyers should fill the FHSA before saving for the home anywhere else.