FHSA in 2027: Contribution Room, Limits and How to Use It for a GTA Home

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 2 November 2026 · 9 min read — The FHSA limit for 2027, how to work out your room, why opening before 31 December 2026 matters, and what $40,000 buys toward a GTA home.

This guide is for first-time buyers in Toronto and the GTA who want to use a First Home Savings Account (FHSA) in 2027. You will find the 2027 limit, how to work out your own room, the steps to take before 31 December 2026, and how far the money goes toward a GTA down payment.

What is the FHSA contribution limit for 2027?

The FHSA limit for 2027 is $8,000, with a lifetime maximum of $40,000. These are fixed dollar amounts in section 146.6 of the Income Tax Act. Unlike the TFSA limit, they are not indexed to inflation, so the $8,000 that applied when the account launched in 2023 still applies in 2027. Budget 2026, tabled in early November 2026, proposed no change to the FHSA rules. It only set aside money for CRA to keep running the program.

The FHSA mixes the best parts of an RRSP and a TFSA. Contributions are generally tax-deductible, like an RRSP. A qualifying withdrawal to buy your first home is tax-free, like a TFSA. And unlike the Home Buyers’ Plan, you never pay it back.

How much FHSA room will you have in 2027?

Your 2027 room is $8,000 plus any room you did not use in 2026, but CRA caps the carry-forward at $8,000. So the most you can put in during 2027 is $16,000, and never more than what is left of your $40,000 lifetime limit.

Source: my calculations using CRA’s FHSA participation room rules (annual $8,000, carry-forward capped at $8,000, lifetime $40,000), as of November 2026. Your CRA account and FHSA issuer show your exact room.

Transfers from your RRSP into an FHSA use the same room as contributions. If you have more than one FHSA, your room is shared across all of them.

Why open an FHSA before 31 December 2026?

Because room only starts in the year you open your first FHSA. It does not build up from the year you turned 18 or from 2023. If you open an account by 31 December 2026 and put nothing in, you still earn $8,000 of 2026 room, which carries into 2027. That turns your 2027 limit from $8,000 into $16,000.

Timing is calendar-year only. CRA says FHSA contributions made in the first 60 days of a year cannot be deducted on the previous year’s return, unlike RRSP contributions. If you want 2026 room used for a 2026 deduction, the money has to go in by 31 December. CRA also says you must file Schedule 15 with your tax return for the year you open the account, even if you put nothing in.

Who can open an FHSA in 2027?

According to CRA, you can open an FHSA if, at the time you open it, you are:

• a resident of Canada;
• at least 18 (19 in provinces where that is the age to sign a contract), and no older than 71 by 31 December of that year;
• a first-time home buyer, meaning you did not live in a home you owned or jointly owned as your main home in the current year or the previous four calendar years. For an account opened in 2027, that window runs from 1 January 2023.

Your spouse or common-law partner must not have owned a home you lived in as your main home in that same window. Each spouse can have their own FHSA, so a couple who both qualify can save $80,000 in total.

How do you use your FHSA to buy a home in the GTA?

You make what CRA calls a qualifying withdrawal. It is tax-free if all of these are true:

• You still pass the first-time buyer test, not counting the 30 days just before the withdrawal.
• You have a written agreement to buy or build a home in Canada, with closing before 1 October of the year after the withdrawal.
• You did not acquire the home more than 30 days before the withdrawal.
• You plan to live in it as your main home within one year of buying it.
• You are a resident of Canada from the first withdrawal until you buy.

You give your FHSA issuer Form RC725 to request the withdrawal. In practice, I tell clients to request it soon after their offer is firm, so the money is in their bank account well before the deposit and closing dates. A pre-approval alone is not a written agreement to buy.

How far does $40,000 go toward a GTA down payment?

A full FHSA of $40,000 covers the minimum down payment on any home up to $650,000. That is 5% of the first $500,000 ($25,000) plus 10% of the next $150,000 ($15,000). A couple with two full FHSAs, $80,000, covers the minimum up to $1.05 million.

Source: TRREB MLS data via REALM, January–October 2026 (median sold prices at city or Toronto district level). Minimum down payments are my calculations using the federal 5% and 10% rules.

Remember that the minimum down payment is not the only cash you need. Land transfer tax, legal fees and, with less than 20% down, the sales tax on the mortgage insurance premium are due on closing. My list of buyer closing costs in Ontario for 2027 covers them, and my guide to the minimum down payment in Ontario shows the math at every price.

Can you use the FHSA and the Home Buyers’ Plan together?

Yes. CRA says you can make a qualifying FHSA withdrawal and a Home Buyers’ Plan withdrawal for the same home, as long as you meet the conditions for each when you make it. That is up to $40,000 from the FHSA plus $60,000 from your RRSP, or $100,000 per person before growth.

Most buyers should fill the FHSA first, because it is deductible and never repaid. The Home Buyers’ Plan has to be paid back over 15 years. My comparison of the FHSA vs the Home Buyers’ Plan goes through the order step by step.

When should you claim your FHSA tax deduction?

Not necessarily in the year you contribute. CRA says unused FHSA deductions can be carried forward to later years, even after your FHSAs are closed. If your income is low in 2027 and you expect a raise, you can contribute now, let the money grow tax-free, and claim the deduction in a higher-income year when it saves more tax.

Two limits apply. Money you transfer from an RRSP into an FHSA is not deductible, because you already got a deduction when it went into the RRSP. And contributions made after your first qualifying withdrawal can never be deducted.

What happens to your FHSA if you do not buy a home?

You have time, but not forever. CRA says the account must be closed by 31 December of the year in which the earliest of these happens: the 15th anniversary of opening your first FHSA, you turn 71, or the year after your first qualifying withdrawal.

If you decide not to buy, you can move the money directly to your RRSP or RRIF. CRA says a direct transfer does not use your RRSP room and is not taxed at that point. Or you can withdraw it, and the amount is added to your income.

What to do next

1. Open an FHSA at your bank or credit union before 31 December 2026, if you qualify.
2. Check your 2027 room in your CRA account once your 2026 return is assessed.
3. Plan your 2027 contributions by 31 December 2027, and decide whether to claim the deduction now or later.
4. Compare your FHSA balance with the minimum down payment at your target price.
5. Book a call with me to plan the timing of your withdrawal around your offer and closing dates.

Frequently asked questions

Sources

• CRA: Participating in your FHSAs (contribution room and carry-forward)
• CRA: Opening your FHSAs (eligibility)
• CRA: Withdrawals and transfers out of your FHSAs
• CRA: Tax deductions for FHSA contributions
• CRA: Closing your FHSA (maximum participation period)
• Income Tax Act, section 146.6 (annual FHSA limit and $40,000 lifetime limit)
• Budget 2026, Chapter 3: A more affordable life

Related reading

• The Bank of Canada Raised Rates: What It Means for GTA Buyers, Sellers and Owners
• Variable-Rate Mortgage After the Hike: How Much Your Payment Changes
• Should I Lock In My Variable Mortgage Before 2027?
• Mortgage Renewal in 2027 After the Rate Hike: Your Options in Ontario