FHSA 2026: Limits, Carry-Forward and How Toronto Buyers Use It

If you are saving for your first home in Toronto, the First Home Savings Account is usually the first account to fill. It is the only registered account that gives you a tax deduction when you put money in and lets you take it out tax-free for a qualifying home.

The limits in 2026

The FHSA limits have not changed since the account launched. You can contribute $8,000 a year, up to $40,000 over your lifetime. Those amounts are set in legislation and are not indexed to inflation, so they lose a little real value each year. That is a reason to start early rather than wait.

Carry-forward: the rule most people get wrong

Unused room carries forward, but only up to $8,000 and only from the year before. The most you can put in during any one calendar year is $16,000: this year’s $8,000 plus a maximum of $8,000 carried forward. Room from two years ago that you never used and never carried is gone.

Room only starts building once you open an account. Opening one with a small deposit, even if you cannot fund it fully, starts the clock.

Who can open one

You must be a Canadian resident, at least 18 (19 in some provinces; 18 in Ontario), and a first-time home buyer. For FHSA purposes that means you did not live in a home you or your spouse or common-law partner owned at any time in the current year or the previous four calendar years.

You have 15 years from opening your first FHSA to use it, and it must close by the end of the year you turn 71.

Check your budget now

The calculator applies the stress test, land transfer tax and rebates, and condo fees.

Taking money out for a home

A qualifying withdrawal is tax-free and does not have to be repaid. You need a written agreement to buy or build a qualifying home in Canada, and you must intend to live in it as your principal residence within a year of buying.

If you never buy, you can transfer the balance to your RRSP or RRIF without using RRSP room, so the tax deferral is not lost.

How couples use it in Toronto

Each partner has their own FHSA with their own $8,000 and $40,000 limits. Two partners who each max out their accounts can bring $80,000, plus investment growth, to a purchase, before touching an RRSP.

Mistakes to avoid

• Over-contributing. CRA charges 1% a month on the excess until it is removed. Check your room in CRA My Account; your bank cannot see accounts at other institutions.
• Assuming room builds automatically. It does not build until the account is open.
• Missing the December 31 deadline for a contribution to count in that tax year.
• Forgetting the deduction can be saved. You can contribute now and claim the deduction in a later, higher-income year.

Where the FHSA fits in a Toronto down payment

Toronto prices mean the FHSA alone rarely covers a down payment. Most first-time buyers pair it with the RRSP Home Buyers’ Plan and their own savings. The order usually matters: use the FHSA first because nothing is repaid, then the Home Buyers’ Plan for the rest.

Talk it through with me

Frequently asked questions

Sources

• Canada Revenue Agency — First Home Savings Account — contribution limits, carry-forward, qualifying withdrawals
• Canada Revenue Agency — Home Buyers’ Plan — using the FHSA and HBP for the same home

Related reading

• Best Realtor for First-Time Home Buyers in Toronto (2026): What to Look For
• Minimum Down Payment in Ontario 2026: The Exact Amount for Every Price Point
• The First-Time Home Buyers’ GST Rebate: Who Actually Gets the Full $50,000
• RRSP Home Buyers’ Plan in 2026: the $60,000 withdrawal and what changed
• FHSA vs RRSP Home Buyers’ Plan: which to use first (and how to stack them)
• Gifted down payment in Ontario: gift letters, lender rules and what families should know