FHSA deadline: What to do before December 31 to keep your room

Unlike TFSA room that carries forward forever, FHSA contribution room expires. Don't use your 2025 allocation by December 31, and it's gone. No carrying it forward to 2026.

The FHSA gives you $8,000 in new room every year, up to a $40,000 lifetime limit. But here's the catch most people miss: you only get that annual room if your account is actually open. Open your FHSA in March 2025? You get the full $8,000 for 2025, but only from March onward to use it. The CRA doesn't backdate your eligibility to January 1.

This creates a specific problem for anyone who opened their FHSA mid-year. Say you opened yours in June 2025 and contributed $4,000 by now. You've still got $4,000 in unused 2025 room that disappears in three weeks. There's no grace period like RRSPs get until March 1.

The December scramble

If you've got unused 2025 FHSA room, you need to decide by December 31: contribute it or lose it. That's different from every other registered account in Canada.

For someone who opened their account in 2025, this could mean losing thousands. Say you qualified for the FHSA in January but didn't open one until September. You got $8,000 in room when you opened it, but if you only contributed $2,000 by now, you're about to lose $6,000 in room that won't come back.

The math gets worse if you're close to the $40,000 lifetime limit. Once you hit that cap, you can't contribute anymore even if you haven't bought a home yet. Lose room early in the program, and you might never get back to the full $40,000.

What counts as a contribution

Your contribution needs to be in the account by December 31, not just initiated. If you're transferring from another account or mailing a cheque, build in processing time. Most financial institutions need 1-2 business days for electronic transfers, longer for physical deposits.

You can contribute cash or transfer investments from a non-registered account. What you can't do is move money from your RRSP or TFSA directly into the FHSA - those need to be withdrawn first, then contributed as cash.

At $80,000 income in Ontario, that $8,000 FHSA contribution saves you about $2,500 in taxes. TaxSplit.ca will show you exactly what your refund would be based on your province and income. The deduction works the same as RRSP contributions - it reduces your taxable income dollar for dollar.

If you can't max it out

Don't have $8,000 lying around? Contribute what you can. Even $1,000 is better than losing the entire year's room. You get the tax deduction on whatever you contribute, and the unused room is still gone whether you put in zero or $7,000.

Some people borrow to maximize the contribution, then use the tax refund to pay down the loan. That works if your marginal tax rate is high enough and you can get a short-term loan at a reasonable rate. But don't borrow money you can't afford to lose - the FHSA is still an investment account, and markets can go down.

The deadline is firm. FHSA contributions don't get the RRSP's grace period until early March. December 31 means December 31. After that, your 2026 room starts accumulating, but 2025 is gone forever.