By Josh Tagg, mortgage broker · Mortgages for Less with INDI Mortgage · Calgary, serving all of Alberta ·
If buying your first home is part of your 2026 plans, opening a First Home Savings Account (FHSA) before the end of this year could be one of the smartest financial moves you make. Even if you’re not ready to contribute right away, opening your FHSA before December 31 unlocks an important tax advantage that can help you save more — and faster — for your first home.
What is an FHSA and how does it work?
The First Home Savings Account is a government-registered savings plan designed to help Canadians save for their first home. Introduced in 2023, the FHSA combines the best features of an RRSP and a TFSA. You can contribute money to the account, invest it for growth, and when it’s time to buy your first home, you can withdraw both your contributions and any investment gains tax-free — as long as it’s for a qualifying home purchase.
Nearly half a million Canadians have already opened an FHSA since its launch, according to Statistics Canada. It’s quickly becoming one of the most effective ways to save for a down payment, especially in Alberta, where home prices remain relatively affordable compared to other major provinces.
You can hold a wide range of investments in an FHSA, including cash, mutual funds, bonds, and Guaranteed Investment Certificates (GICs). Contributions are tax-deductible, which means they can lower your taxable income when you file your taxes, similar to RRSP contributions.
Who can open an FHSA?
To open an FHSA, you must:
Be a Canadian resident
Be at least 18 years old (or 19 in provinces where that is the age of majority) and under 71
Be a first-time homebuyer, meaning you haven’t lived in a home you or your spouse or partner owned in the current year or the previous four calendar years
Even if you’ve owned a home in the past, you may still qualify as a first-time buyer if it has been more than four years since you last owned and lived in one.
How much can you contribute to an FHSA?
You can contribute up to $8,000 per year and up to a lifetime total of $40,000. Any unused contribution room can carry forward to the following year.
Here’s how that can benefit you: if you open an FHSA this year (even with no contributions yet), you’ll unlock your 2025 contribution room. Then, when January 2026 arrives, you’ll also gain your next $8,000 of new contribution room — giving you a total of $16,000 you can contribute right away.
That’s a major reason to open your account before December 31. Even if you don’t have cash to deposit this year, simply opening the FHSA ensures you don’t lose this year’s $8,000 room — you’ll have it available to use later.
How long can an FHSA stay open?
An FHSA can stay open for up to 15 years from the date it’s opened, or until the end of the year you turn 71 — whichever comes first. Once you make a qualifying withdrawal to buy your first home, you’ll need to close the account by the end of the following year.
If you decide not to use your FHSA for a home purchase, you can transfer the balance to your RRSP or RRIF without paying tax. If you withdraw it for other reasons, however, the funds will be considered taxable income.
How does the FHSA compare with a TFSA and an RRSP?
The FHSA shares features with both the TFSA and the RRSP:
| FHSA | RRSP | TFSA | |
|---|---|---|---|
| Eligibility | Canadian resident, 18 or older, no home owned in the last 5 calendar years | Canadian resident, 71 or under, earning an income | 18 or older; open to non-residents (at a price) |
| Contribution limit | $8,000 a year, $40,000 lifetime; unused room rolls forward | 18% of the previous year’s income or the yearly government limit ($32,490 for 2025); unused room rolls forward | Set yearly ($7,000 for 2025); unused room rolls forward |
| Tax on contributions | Tax-deductible, tax-free growth | Tax-deductible to a limit | Tax-free growth |
| Tax on withdrawals | Tax-free once you’ve signed a purchase agreement on a home | Withholding of 10% to 30%; not taxed if used for the Home Buyers’ Plan (up to $60,000) and repaid to the RRSP | Not taxed |
| Withdrawal timing | Tax-free with a signed purchase agreement on a home; taxed in all other cases | Any time | Any time |
This flexibility allows you to use multiple programs together. For instance, you can combine FHSA savings with the RRSP Home Buyers’ Plan and TFSA withdrawals to maximize your down payment and minimize taxes.
When might it be better to wait to open an FHSA?
Opening an FHSA starts the 15-year clock, so if you’re many years away from buying your first home, you might want to wait. Also, FHSA contributions are most beneficial when you’re earning a higher income and can take advantage of the tax deduction. However, you can always open your account now and defer claiming the deduction until a future year when it will save you more on taxes.
How can a mortgage broker help you put your FHSA to work?
Understanding the FHSA is just one piece of the homeownership puzzle. When it comes time to get pre-approved, compare rates, and structure your mortgage, having me as your broker makes all the difference.
I help first-time buyers turn savings plans like the FHSA into homeownership success stories. I can guide you through how the FHSA fits into your broader financing strategy and ensure your mortgage plan aligns with your goals.
If you’re thinking about buying your first home in 2026, now is the time to act. Open your FHSA before December 31, and then reach out to me to start planning your next steps toward homeownership.
How an Alberta mortgage broker helps first-time buyers with an FHSA
Your FHSA is one part of the down payment. We plan the rest of the purchase around it:
- We map out your down payment sources: FHSA, RRSP Home Buyers’ Plan, TFSA and savings.
- We get you pre-approved so you know what price range your savings support.
- We time the purchase so your FHSA withdrawal lines up with your signed purchase agreement.
- We compare lenders and rates instead of taking the first offer from your bank.
- We work with first-time buyers across Calgary, Edmonton and all of Alberta.
Planning to buy your first home?
Let’s build a down payment and mortgage plan around your FHSA.
Apply Online → Book a Discovery Call → Serving Calgary, Edmonton & all of Alberta · Mortgages for Less with INDI MortgageFHSA: common questions
Why should I open an FHSA before December 31?
How much can I contribute to an FHSA?
Who qualifies to open an FHSA?
Are FHSA withdrawals taxed?
How long can an FHSA stay open?
Can I use an FHSA with the RRSP Home Buyers’ Plan?
Do I have to claim the FHSA tax deduction in the year I contribute?
This article is general information for Canadian first-time homebuyers, not tax, investment, financial or mortgage advice. FHSA, RRSP and TFSA rules and limits are set by the Canada Revenue Agency and can change; confirm the current rules with the CRA or a qualified tax professional before you contribute or withdraw. Any mortgage is subject to lender approval. Please speak with a licensed mortgage professional about your specific situation. Mortgages for Less with INDI Mortgage.
