Canada gives you three powerful registered accounts — but each works differently. The FHSA is the newest (launched 2023) and the only one that's both tax-deductible and tax-free on withdrawal, but it's exclusively for buying your first home. Here's how all three compare for 2026.
| Feature | FHSA | RRSP | TFSA |
|---|---|---|---|
| Annual contribution limit | $8,000 | 18% of income (max $32,490) | $7,000 |
| Lifetime limit | $40,000 | No lifetime cap | $102,000 (cumulative to 2026) |
| Tax on contributions | Tax-deductible | Tax-deductible | After-tax (no deduction) |
| Tax on growth | Tax-free | Tax-deferred | Tax-free |
| Tax on withdrawal | Tax-free (qualifying purchase) | Fully taxable | Tax-free |
| Carry-forward room | Up to $8,000/yr | Unlimited carry-forward | Unlimited carry-forward |
| Eligibility | First-time home buyers, 18–71 | Anyone with earned income | Any Canadian resident 18+ |
| Withdrawal restrictions | Must be qualifying home purchase | HBP ($60K) or LLP; otherwise taxable | No restrictions |
| Account deadline | 15 years or age 71 | Convert to RRIF by age 71 | No deadline |
| Impact on benefits | Withdrawals not counted as income | Withdrawals count as income (affects GIS, CCB) | Withdrawals not counted as income |
Many financial planners recommend a layered approach: max out your FHSA first ($8,000/year) if you're house-hunting, then contribute enough to your RRSP to get any employer match, then fill your TFSA. Once the TFSA is full, go back to the RRSP.
A couple saving for their first home could contribute $16,000/year combined to FHSAs ($8,000 each), building $40,000 each over 5 years — that's $80,000 in tax-deductible, tax-free money for a down payment. Add $120,000 from the Home Buyers' Plan (2 × $60,000 from RRSPs) and you've got $200,000.
One subtle detail: FHSA contributions are deductible in the year you contribute, but you can carry forward the deduction to a future year when your income (and marginal rate) is higher. This is the same strategy used with RRSP contributions — contribute now, deduct later.
Reviewed April 2026 · Based on CRA published limits and rules