First Home Savings Account (FHSA) Complete Guide 2026

The First Home Savings Account might be the best thing to happen to Canadian first-time homebuyers in years. But when I first heard about it in 2023, I had questions. Lots of them. What's the difference from a TFSA? Can I combine it with the Home Buyers' Plan? What if I never buy a house?

After digging through CRA documents and talking to financial advisors, I finally understand it. So here's the complete guide I wish existed when I started researching - with actual numbers and real examples.

What is the FHSA?

The First Home Savings Account is a registered account that combines the best features of TFSAs and RRSPs:

• Tax deduction when you contribute (like an RRSP)
• Tax-free withdrawals for your first home (like a TFSA)
• Tax-free growth inside the account (like both)

It's basically a double tax advantage. You get a deduction going in AND no tax coming out. That's huge.

2026 Contribution Limits

So in 5 years of maxing it out, you can save $40,000 tax-free for your home. Plus all the growth on top.

The Carryforward Trick Most People Miss

This is important: you can carry forward up to $8,000 of unused contribution room. But here's the catch - you only get carryforward room AFTER you open the account.

Who Can Open an FHSA?

You need to meet ALL of these:

1. Canadian resident with a valid SIN
2. Between 18 and 71 years old
3. First-time home buyer - meaning you (or your spouse) haven't owned a home you lived in during the current year or the previous 4 calendar years

That last one is interesting. You could have owned a rental property you never lived in and still qualify. Or you could have owned a home 6 years ago and qualify again.

Withdrawal Rules: Here's Where It Gets Good

When you're ready to buy, you can withdraw everything tax-free. But you need to meet these conditions:

One thing that surprised me: there's no minimum time you have to live there. As long as you intended it to be your principal residence, you're good.

Can I Use FHSA + Home Buyers' Plan Together?

Yes! This is huge. You can:

• Withdraw up to $40,000 from your FHSA (tax-free, no repayment)
• Withdraw up to $60,000 from your RRSP via HBP (repay over 15 years)
• Combined: $100,000 for your down payment

For a couple, that's potentially $200,000. In this housing market, every dollar counts.

What If I Never Buy a Home?

You have 15 years from opening the account (or until you turn 71). After that, you must close it. But here's the safety net:

Worst case scenario: it becomes an extra RRSP. Not bad at all.

FHSA vs TFSA vs RRSP: Quick Comparison

My Savings Strategy for 2026

If I were saving for a home in 2026, here's what I'd do:

1. Max FHSA first - $8,000/year ($667/month) for the double tax benefit
2. Then max TFSA - $7,000/year ($583/month) for flexible, tax-free growth
3. Then RRSP if high income - only if your tax rate justifies it
4. Track everything - know exactly how close you are to your down payment goal

$8,000 per year sounds like a lot, but break it down: that's $667/month or $154/week. Still a lot, but more achievable when you see it as a weekly goal in your budget.

Budgeting for Your FHSA

This is where your budget matters. Saving $667/month doesn't just happen. You need to:

• Know where your money currently goes
• Find $667 in your budget (or whatever you can afford)
• Set up automatic transfers on payday
• Track your progress toward that $40,000 lifetime goal

Can't do $667? That's fine. Even $200/month = $2,400/year = $12,000 in 5 years + growth. Something is always better than nothing.

Important Dates to Remember

The Bottom Line

The FHSA is genuinely one of the best savings tools Canada has created for first-time buyers. Double tax advantage, $40,000 lifetime limit, can combine with HBP, and worst case it becomes RRSP savings.

If you're planning to buy your first home in the next 5-15 years, open an FHSA. Even if you can only contribute a little bit right now, start. The account needs to be open for that carryforward room to kick in.

Your future homeowner self will thank you.