How to open an FHSA: eligibility, where to go, what to expect

You can't open an FHSA - First Home Savings Account - if you've owned a home in the past four years. That's the catch everyone misses. It's not just about being a first-time buyer today. If you sold your place in 2022, you're still locked out until 2026.

The other eligibility rules are straightforward: you need to be 18 or older, a Canadian resident, and planning to buy your first home. You can open one even if you're married to someone who owns a home - their ownership doesn't disqualify you from your own account.

Where to open an FHSA

Most major banks offer FHSAs: TD, RBC, Scotiabank, BMO, CIBC. Credit unions have them too. So do online brokers like Questrade and Wealthsimple. You don't need to bank where you already have accounts - shop around for the best rates if you're planning to hold cash or GICs.

The process is similar to opening any registered account. You'll need government-issued ID, your Social Insurance Number, and proof of Canadian residency. Some institutions want a void cheque or direct deposit form to link your regular bank account for transfers.

Expect the application to take 15-30 minutes online, longer if you're doing it in person. The account usually opens within a few business days, though funding it can happen immediately if you're transferring from another account at the same institution.

What the institution will ask

They'll confirm you meet the eligibility requirements, but they won't verify that you actually intend to buy a home. That part is between you and the CRA when you eventually make a withdrawal. The institution just needs to know you qualify to open the account.

You'll choose what to hold in the account - cash, GICs, stocks, bonds, ETFs. The FHSA works like other registered accounts in that respect. Growth is tax-free, and qualifying withdrawals for your first home purchase are tax-free too.

Most people start with cash or a high-interest savings account option while they figure out their timeline. If you're buying within two years, cash makes sense. Longer timeline, you might consider GICs or investments, but remember that investment losses in an FHSA can't be claimed against other income.

The contribution room timing

You get $8,000 in contribution room each year, up to $40,000 lifetime. But here's what trips people up: you don't get room for the year until January 1st, even if you opened the account in March. Open it in September 2025, you still only get $8,000 for the year, not a prorated amount.

The 2025 contribution limits are the same across all institutions - $8,000 annually, $40,000 lifetime. You can contribute and claim the tax deduction in the same year, unlike RRSPs where contributions can be claimed in the following tax year.

Room carries forward if you don't use it, but only while the account exists. Close your FHSA, and any unused room disappears. You can't just reopen a new one later to get it back.

After you open it

Contributions are tax-deductible, like an RRSP. At $75,000 income in Ontario, putting $8,000 into an FHSA saves you roughly $2,400 in taxes. TaxSplit.ca will show you the exact refund for your income and province.

You have 15 years to use the money for a home purchase, or until you turn 71, whichever comes first. If you don't buy a home, the money can transfer to an RRSP or RRIF without tax consequences, though you'll lose the tax-free withdrawal benefit.

Most institutions will send you a tax slip - the RC343 - after you contribute. Keep it for your tax return. The deduction works the same way as RRSP contributions.