The answer of how much to contribute to your first home savings account (FHSA) is highly personal and depends on your home-buying plans, your budget, and your available contribution room.

An FHSA helps you save for your first home and it's one of the most tax-advantageous ways to save money for anything at all in Canada:

1. you get a tax deduction for your contributions,
2. your savings grow tax-free, and you don't pay tax on your withdrawal to buy a qualifying home.

The answer of how much to invest is highly personal and depends on your home-buying plans, your budget, and your available contribution room. If you're eligible for a first home savings account (FHSA), it gives you two tax benefits: contributions are generally deductible, and qualifying withdrawals to buy your first home are tax-free.

Not quite ready to contribute but will be soon?

Your FHSA contribution room starts building when you open your first account. You get $8,000 of room each year and can carry forward up to $8,000 of unused room. For example, if you open an FHSA in 2025 but don’t contribute anything, you’ll have $16,000 of contribution room in 2026. If you’re eligible and think you'll buy your first home within the next 15 years and that you will have more available to save next year, opening an account now could help you build a bit more contribution room.

Opening an account also starts the 15-year clock. You'll need to close your FHSAs by the end of the year of the 15th anniversary, or sooner if you turn 71 or reach the end of the year after your first qualifying withdrawal. Keep your home-buying timeline in mind.

Check your room before adding money

After the first year, check your FHSA participation room in your CRA account before contributing. There is a lifetime limit of $40,000.

See how a contribution could impact your tax return

Try a few amounts in the FHSA deduction field of our income tax calculator to compare your estimated refund or balance owing. Like an RRSP deduction, an FHSA deduction reduces the income you pay tax on. If the whole deduction falls in a combined federal and provincial tax bracket of 30%, a $1,000 deduction reduces your income tax by about $300. The effect on your return depends on your income and where you live. Like a TFSA you don't need to pay tax when you withdraw.

You can generally claim the deduction for the year you contribute or save it for a later year. If you expect to earn more later, you can contribute now and claim the deduction when you're in a higher tax bracket. Contributions after your first qualifying withdrawal aren't deductible, but you can carry forward the deduction indefinitely, even after buying your home.