The FHSA: saving for a first home and planning your withdrawal

The First Home Savings Account can combine deductible contributions with a tax-free qualifying withdrawal for a first home. The benefit depends on meeting CRA’s rules. Opening the account and withdrawing for a purchase have different eligibility tests.

Opening an account and building room

You generally need to be a Canadian resident, at least 18 and no more than 71 in the year, and meet the opening first-time buyer test. That test considers homes you or your spouse or common-law partner owned and lived in during the relevant period. In BC, providers may require age 19 to enter the account contract. Ask your institution to confirm eligibility.

Participation room begins when you open your first FHSA—not for earlier years.
The initial annual participation room is $8,000.
The lifetime contribution and RRSP-transfer limit is generally $40,000 across all your FHSAs.
Unused participation room may carry forward, generally up to $8,000, subject to CRA’s calculation.

Contributions, transfers and investments

Contributions may be deductible, but an RRSP-to-FHSA transfer is not a new deduction and uses FHSA room. Overcontributions can attract tax. Investment gains do not use contribution room, although investment losses can reduce what you have available. Money needed for an imminent purchase should be accessible in time; investment suitability is a question for your financial adviser.

Making a qualifying withdrawal

CRA requires specific conditions, including a written agreement to buy or build a qualifying home in Canada before October 1 of the year following the withdrawal year. You must meet the withdrawal first-time buyer and residency tests, not have acquired the home more than 30 days before withdrawal, and intend to occupy it as your principal residence within one year after buying or building. Ask your institution about Form RC725 and verify the current requirements before withdrawing.

Tell Matt how much of your down payment is in the FHSA.
Allow processing and investment-settlement time.
Keep the agreement, statements and withdrawal confirmation for the lender’s money trail.

What happens afterward

A qualifying withdrawal generally has no repayment requirement. The account’s maximum participation period ends at the earliest applicable CRA deadline: generally the end of the year of the fifteenth anniversary of opening, the year you turn 71, or the year following your first qualifying withdrawal. Remaining funds may generally be directly transferred to an RRSP or RRIF on a tax-deferred basis; an ordinary withdrawal may be taxable.

Using an FHSA with other savings

An FHSA and the RRSP Home Buyers’ Plan may be used for the same qualifying home if you meet each program’s separate requirements. Do not assume eligibility for one means eligibility for the other. A spouse or partner also has their own eligibility and room. Ask a tax adviser or your financial institution to confirm your position; Matt helps coordinate the mortgage documentation and timing.

Let’s make this personal

Tell Matt what matters most to you, and what feels unclear. We can help you work through the mortgage side of the decision and coordinate the next steps with your other professionals. Email matt.parker@indimortgage.ca or call 778.897.2554.

General Canadian mortgage guidance with British Columbia context; reviewed October 16, 2026. Your lender’s written requirements, mortgage contract and professional legal or tax advice take priority.