How to Open an FHSA in Canada

The short answer

An FHSA is a registered account for first-time home buyers, and you open it through a financial institution — a bank, credit union, or trust or insurance company. To open one you must be a qualifying individual: 18 or older, a resident of Canada, and a first-time home buyer under the Canada Revenue Agency's opening test. Your room is $8,000 in the year you open your first FHSA and $8,000 in each later year, up to a $40,000 lifetime limit. Room starts only when you open the account. Contributions are generally deductible, growth inside the account is tax-sheltered, and a qualifying withdrawal to buy a first home is tax-free and does not have to be repaid.

An FHSA is not a TFSA and it is not an RRSP. It has its own room rules, its own 15-year clock, and it can only be used for a first home. This guide covers the FHSA only. For the TFSA, see How to Open a TFSA in Canada; for the RRSP, see How to Open an RRSP in Canada. This guide gives process steps only, not financial advice.

Who can open an FHSA

You must meet all of the following conditions when you open the account:

• 18 years of age or older.
• A resident of Canada.
• A first-time home buyer, for the purpose of opening an FHSA.

If you do not meet all of them, you are not a qualifying individual and cannot open an FHSA. You also cannot open an FHSA after the end of your maximum participation period — the period that starts when you open your first FHSA and ends on December 31 of the year in which the earliest of three events happens: the 15th anniversary of opening your first FHSA, the year you turn 71, or the year following your first qualifying withdrawal.

The first-time home buyer test

The CRA uses two different first-time-buyer tests, one for opening and one for withdrawing. Do not mix them up.

For opening an FHSA, you count as a first-time home buyer if you did not, at any time in the current calendar year before the account is opened or at any time in the preceding four calendar years, live in a qualifying home as your principal place of residence that either you owned or jointly owned, or your spouse or common-law partner at the time the account is opened owned or jointly owned.

For making a qualifying withdrawal, the test is narrower: only a home you owned or jointly owned yourself counts, and the 30 days immediately before the withdrawal do not count. So a home your spouse or common-law partner owns can block you from opening an FHSA, but it does not block you from making a qualifying withdrawal from an FHSA you already hold.

A qualifying home is a housing unit located in Canada. That includes existing homes and homes being built, such as single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings.

Step 1: Choose an issuer and an account type

You can open one or more than one FHSA through an FHSA issuer, such as a bank, credit union, or a trust or insurance company. Your issuer will advise you on the types of FHSAs and the qualified investments they offer.

There are three types of FHSA:

• A depositary FHSA: an account with a financial institution that holds money, term deposits, or guaranteed investment certificates.
• A trusteed FHSA: a trust with a trust company as trustee that holds qualified investments such as money, term deposits, guaranteed investment certificates, government and corporate bonds, mutual funds, and securities listed on a designated stock exchange.
• An insured FHSA: an annuity contract with a licensed annuity provider.

You can also set up a self-directed FHSA if you prefer to build and manage your own investment portfolio by buying and selling qualified investments. Ask your issuer which types it offers.

Step 2: Open the account

To open an FHSA, contact your issuer and provide the information it needs to register the account, including your Social Insurance Number, your date of birth, and any supporting documents the issuer may need to certify that you are a qualifying individual.

You may want to designate a beneficiary on your account when you open it. If you give the issuer information that is later found to be incorrect, the registration of your FHSA may be revoked back to the date it was opened. After revocation, contributions are not tax-deductible, amounts transferred from your RRSPs are treated as RRSP withdrawals and reported as income, and income earned in the account is not tax-free.

Opening the account matters even if you contribute nothing yet. Your participation room in the year you open your first FHSA is $8,000, and the carry-forward is $0 that year. An account opened in December gives the full $8,000 of room for that year.

Step 3: Contribute within your room

Your participation room for the year is the maximum you can contribute to your FHSAs or transfer from your RRSPs to your FHSAs in the year without creating an excess amount. The figures, as the CRA pages state them, are:

• $8,000 of new room in the year you open your first FHSA, and $8,000 in each later year.
• A lifetime FHSA limit of $40,000, covering contributions and RRSP transfers combined, across all of your FHSAs.
• Carry-forward capped at $8,000, so the most you can put in during any one year is $16,000.

The limits are the same in 2026 as in earlier years: the CRA pages state the $8,000 annual amount and the $40,000 lifetime limit without indexing them to a year. If you contribute or transfer more than your participation room for the year, you have an excess FHSA amount. You generally have to pay a tax of 1% of the highest excess amount in the month, for each month the excess remains in the account. You can reduce or eliminate an excess amount with a designated withdrawal, using Form RC727, or a designated transfer to your RRSP or RRIF.

You can also transfer amounts directly from your RRSPs to your FHSAs. Those transfers count against the same $8,000-a-year room and the same $40,000 lifetime limit as contributions. Transfers from your RRSPs to your FHSAs are not deductible.

Step 4: File Schedule 15 with your tax return

When you file your income tax and benefit return for the year you open your first FHSA, complete Schedule 15 — FHSA Contributions, Transfers and Activities — to let the CRA know that you opened your first FHSA, even if you did not make any contributions or transfers in that year. You can use Schedule 15 to work out your annual FHSA limit.

Contributions are generally deductible on your income tax and benefit return for the year of the contribution or a future year, in a similar way to RRSP contributions. You do not have to claim the deduction in the year you contribute; unused contributions carry forward and can be claimed as a deduction up to your annual FHSA limit for the next year.

Step 5: Make a qualifying withdrawal to buy a home

A qualifying withdrawal is a withdrawal to buy a qualifying home where all of the following conditions are met:

• You fill out Form RC725, Request to Make a Qualifying Withdrawal from your FHSA, and give it to your FHSA issuer.
• You are a first-time home buyer for the purpose of making a qualifying withdrawal.
• You have a written agreement to buy or build a qualifying home, with the acquisition or construction completion date before October 1 of the year following the date of the withdrawal.
• You must not have acquired the qualifying home more than 30 days before making the withdrawal.
• You must be a resident of Canada from the time you make your first qualifying withdrawal until the earlier of the acquisition of the qualifying home or the date of your death.
• You must occupy or intend to occupy the qualifying home as your principal place of residence within one year after buying or building it.

If you meet all of the conditions, you can withdraw all of the property from your FHSAs tax-free, in a single withdrawal or a series of withdrawals. There is no minimum number of days that contributions or transfers must stay in the account before you can use them. You do not need to repay a qualifying withdrawal.

If you are buying or building a home together with another person, including your spouse or common-law partner, both of you can make a qualifying withdrawal from your own FHSAs for the same home, as long as you both meet all of the conditions. You can also use the Home Buyers' Plan for the same home: withdraw amounts from your RRSPs under the Home Buyers' Plan and make a qualifying withdrawal from your FHSAs, as long as you meet all of the conditions at the time of each withdrawal.

If you make a qualifying withdrawal and a condition is not met at the time, the withdrawal is treated as a taxable withdrawal and must be included as income on your tax return for the year you received it. Before making a qualifying withdrawal, check that you do not have an excess FHSA amount: a qualifying withdrawal does not reduce or eliminate an excess amount.

Step 6: Close the account

You should close all of your FHSAs on or before December 31 of the year following the year of your first qualifying withdrawal, because your maximum participation period ends at the end of that year. Contributions made after your first qualifying withdrawal are not tax-deductible.

If you never buy a home, the same closing rule applies at the end of your maximum participation period — December 31 of the year of the 15th anniversary of opening your first FHSA, or the year you turn 71, whichever comes first. By that date, either transfer the property directly from your FHSA to your RRSPs or RRIFs, or withdraw it. A transfer to your RRSP or RRIF is tax-free and does not reduce your unused RRSP deduction room; a withdrawal that is not a qualifying withdrawal must be included as income.

If you forget to close the account by the deadline, the FHSA loses its status on that date, and the fair market value of the property on December 31 is included in your income for that tax year. Your issuer will report it on a T4FHSA slip.

What the CRA pages do not state

The CRA pages do not state whether contributions made in the first 60 days of a calendar year can be deducted on the previous year's return, so this guide makes no claim about a 60-day rule: treat the contribution year as the calendar year of the contribution. They do not state a higher minimum age for opening an FHSA in provinces where the age to sign a contract is 19, so this guide states only the CRA's own condition of 18 years of age or older. They do not state a form number for a direct transfer from an RRSP to an FHSA, so this guide does not give one. Figures that were not confirmed on an official page were left out.

Related guides

• How to Open a TFSA in Canada
• How to Open an RRSP in Canada
• First-Home Purchase Roadmap
• First-Home Purchase Closing Checklist

Sources

• Canada Revenue Agency, Opening your FHSAs — the qualifying-individual conditions, the $8,000 room in the opening year, the steps to open an FHSA through an issuer, the three FHSA types, the self-directed option, and the Schedule 15 filing requirement.
• Canada Revenue Agency, Definitions for FHSAs — the $8,000 annual amount, the $40,000 lifetime limit, the carry-forward capped at $8,000, the participation-room calculation, the two first-time-buyer tests, the maximum participation period, and the qualifying-withdrawal conditions including Form RC725.
• Canada Revenue Agency, Withdrawals and transfers out of your FHSAs — qualifying withdrawals, the 1% per month tax on excess amounts, designated withdrawals, combining an FHSA withdrawal with the Home Buyers' Plan, and closing after a qualifying withdrawal.
• Canada Revenue Agency, Closing your FHSA — the closing options at the end of the maximum participation period, the non-deductibility of contributions after a first qualifying withdrawal, and the income inclusion if the account is not closed by the deadline.