# FHSA contribution limit: $8,000 a year, $40,000 for life

Source: https://canadataxdesk.com/registered-accounts/fhsa-contribution-limit
Publisher: Canada Tax Desk (canadataxdesk.com), independent editorial site
Topic: RRSP, TFSA and FHSA
Last updated: 2026-10-22

> The FHSA contribution limit is $8,000 of participation room per year and $40,000 over your lifetime, according to the CRA. Up to $8,000 of unused room carries forward to the next year, so the most you can put in during a single year is $16,000. Room only starts building once you open your first First Home Savings Account (FHSA).

## Key facts

- Annual FHSA participation room: $8,000
- Maximum carry-forward: $8,000 of unused room
- Most you can add in one year: $16,000
- Lifetime FHSA limit: $40,000
- Tax on an excess amount: 1% per month, with no $2,000 cushion

## What is the FHSA contribution limit for 2026?

The FHSA contribution limit for 2026 is $8,000 of new participation room, plus up to $8,000 carried forward from 2025 if you opened your account in 2025 or earlier and left room unused. The CRA calls this amount your FHSA participation room. It covers every FHSA you hold combined, so opening a second account at another bank does not create more room.

A First Home Savings Account (FHSA) is a registered plan that lets an eligible first-time buyer deduct contributions like an RRSP and withdraw the money tax-free to buy a qualifying home, like a TFSA. Both money you deposit and amounts you transfer in from your RRSP count against the same room. Investment growth inside the account does not use up any room.

## What is the FHSA lifetime contribution limit?

The FHSA lifetime contribution limit is $40,000 per person. Once your total contributions and RRSP transfers reach $40,000, you cannot add more, even if you still have years left in your participation period. Growth on top of that $40,000 is not limited, so the balance you withdraw for a home can be larger.

The lifetime cap is per person, not per household. Two spouses who each qualify can each open an FHSA and each contribute up to $40,000. Only the account holder can deduct contributions to their own FHSA, so a spouse can give you money to deposit, but the deduction is yours.

## How does FHSA contribution limit carry-forward work?

Unused FHSA room carries forward one year at a time, but the carry-forward is capped at $8,000. If you open an account and contribute nothing for two years, you do not get $24,000 in year three. You get $8,000 of new room plus the maximum $8,000 carried forward, for $16,000.

### Carry-forward only starts after you open an account

Room does not build up before your first FHSA exists. Someone who first became eligible in 2023 but opened an account in 2026 starts with $8,000 of room in 2026, not the room for 2023 to 2025. The CRA also expects you to file Schedule 15, FHSA Contributions, Transfers and Activities, with your return for the year you open the first account, which is how it tracks your carry-forward.

### What is the most I can contribute in one year?

The most you can contribute to an FHSA in a single year is $16,000: the $8,000 annual amount plus the $8,000 maximum carry-forward. You can only reach that ceiling if you opened your account in an earlier year and left at least $8,000 unused.

## Example: reaching $40,000 over five years

Here is how carry-forward plays out for someone who opens an FHSA in 2026 but can only spare $2,000 in the first year. The table assumes no RRSP transfers and no withdrawals.

| Year | Room available | Contributed | Room carried to next year | Total contributed |
| --- | --- | --- | --- | --- |
| 2026 | $8,000 | $2,000 | $6,000 | $2,000 |
| 2027 | $14,000 ($8,000 + $6,000) | $14,000 | $0 | $16,000 |
| 2028 | $8,000 | $8,000 | $0 | $24,000 |
| 2029 | $8,000 | $8,000 | $0 | $32,000 |
| 2030 | $8,000 | $8,000 | $0 | $40,000 (lifetime limit reached) |

Sample FHSA contribution plan, account opened in 2026

If the same person had skipped 2026 entirely, their 2027 room would have been $16,000, not more. Any room above the $8,000 carry-forward cap is simply lost, although the $40,000 lifetime total can still be reached in later years as long as the account stays open.

## Is there an FHSA over-contribution penalty?

Yes. If your contributions and transfers go above your participation room, the CRA charges a tax of 1% per month on the highest excess FHSA amount in each month until you fix it. Unlike the RRSP, the FHSA has no $2,000 cushion, so even a small mistake starts the tax right away.

For example, if your 2026 room is $8,000 and you deposit $9,500 in March, your excess is $1,500. The tax is $15 for every month the excess remains, which adds up to $150 by December if you do nothing.

### How to remove an FHSA excess

1. Confirm the excess by checking your FHSA details in CRA My Account under the Savings and pension plans tab.
2. Ask your issuer to pay out the excess, then designate it with Form RC727, Designate an Excess FHSA Amount as a Withdrawal from your FHSA or as a Transfer to your RRSP or RRIF. A designated withdrawal is tax-free up to the contributions you made.
3. If the excess came from an RRSP transfer, you can designate a transfer back to your RRSP or RRIF on the same form instead.
4. Report the excess and calculate the tax owing on Form RC728, First Home Savings Account (FHSA) Return, with Schedule A, Excess FHSA Amounts.

> **A new year does not erase the excess automatically:** New room on January 1 reduces an excess, but the 1% monthly tax still applies for every earlier month it existed. Removing the excess quickly is the only way to stop the charge.

## Deducting FHSA contributions on your return

FHSA contributions are deducted on line 20805 of your return, calculated on Schedule 15. You can deduct them in the year you contribute or carry the deduction forward indefinitely to a year when your income, and your tax rate, is higher. The lifetime deduction is capped at the same $40,000.

- **No 60-day window:** contributions made in the first 60 days of a year cannot be deducted on the previous year's return, which is a key difference from the [RRSP contribution deadline](https://canadataxdesk.com/registered-accounts/rrsp-contribution-deadline).
- **RRSP transfers are not deductible:** they use FHSA room, but you already received a deduction when the money went into the RRSP.
- **After a qualifying withdrawal:** any contribution made after your first qualifying withdrawal is not deductible.
- **Fees and losses:** administration fees, brokerage fees and investment losses cannot be deducted.

To estimate what a deduction is worth, multiply it by your marginal rate. An $8,000 deduction for someone whose income falls in the 20.5% federal bracket saves $1,640 in federal tax, plus provincial tax. Our [income tax calculator](https://canadataxdesk.com/tax-rates/income-tax-calculator-canada) shows your marginal rate.

## What is the FHSA contribution limit for 2027?

The FHSA contribution limit for 2027 is expected to follow the same structure: $8,000 of new room plus up to $8,000 carried forward, within the $40,000 lifetime limit. These are fixed dollar amounts in the CRA's rules rather than indexed figures, and as of October 22, 2026 the CRA has not announced any change for 2027. The indexed 2027 amounts, such as the TFSA limit, are expected in November 2026, but they do not change the FHSA figures.

### How the CRA calculates your 2027 room

1. Start with any unused re-participation room at the end of 2026: the part of a taxable FHSA withdrawal that was not needed to eliminate an excess FHSA amount.
2. Add the lesser of two amounts: $8,000 plus your participation room carryforward, minus any excess FHSA amount at the end of 2026; or $40,000 minus everything you have contributed or transferred in so far, adjusted for designated amounts and certain withdrawals.
3. If either amount works out below zero, use $0 for it.

The CRA's own example: Julie opened her first FHSA in March 2026 and contributed $10,000, which created a $2,000 excess. In November 2026 she made a $5,000 taxable withdrawal. Only $2,000 was needed to remove the excess, so the other $3,000 became re-participation room, and her 2027 room is $11,000 ($3,000 plus $8,000).

Your exact 2027 room will appear in CRA My Account and on the notice of assessment for your 2026 return, filed in spring 2027. For the account's other rules, such as eligibility and the 15-year participation period, see our [FHSA rules](https://canadataxdesk.com/registered-accounts/fhsa-rules-canada) page, and for how it fits beside your RRSP and TFSA, see the [RRSP, TFSA and FHSA guide](https://canadataxdesk.com/registered-accounts).

## Using your FHSA room with the Home Buyers' Plan

Your FHSA limit is separate from the $60,000 you can take from your RRSP under the [Home Buyers' Plan](https://canadataxdesk.com/registered-accounts/home-buyers-plan). The CRA allows both for the same qualifying home as long as you meet each program's conditions at the time of each withdrawal. The main trade-off is that HBP money must be paid back over 15 years, as explained in our [HBP repayment](https://canadataxdesk.com/registered-accounts/home-buyers-plan-repayment) page, while a qualifying FHSA withdrawal never has to be repaid.

## Common questions

### Can I contribute $16,000 to my FHSA in the first year?

No. In the year you open your first FHSA your participation room is $8,000. The $16,000 maximum is only possible in a later year, after at least $8,000 of room has been carried forward.

### Does opening an FHSA at two banks double my limit?

No. Your $8,000 annual room and $40,000 lifetime limit apply to all of your FHSAs combined.

### Do FHSA withdrawals give me my room back?

Only in part, and not right away. Under the CRA's calculation, the part of a taxable withdrawal that was not needed to remove an excess becomes re-participation room from the following year, and a designated withdrawal of an excess restores your remaining lifetime limit. A qualifying withdrawal for a home creates no new room, and putting that money back counts as a new contribution that is not deductible.

### Is the FHSA limit the same as the TFSA limit?

No. They are separate accounts with separate room. The TFSA dollar limit for 2026 is $7,000, and as of October 22, 2026 the CRA has not yet published the 2027 TFSA limit. See our [TFSA contribution limit](https://canadataxdesk.com/registered-accounts/tfsa-contribution-limit) page for that account.

### Where can I see my FHSA participation room?

Sign in to CRA My Account, open the Savings and pension plans tab and select View FHSA details. The figure also appears on your notice of assessment or reassessment and on Form T1028.

### Does transferring RRSP money to my FHSA count toward the limit?

Yes. A direct transfer from your RRSP uses FHSA participation room and counts toward the $40,000 lifetime limit, but it is not deductible because the RRSP contribution was already deducted.

## Sources

- [Contributing to your FHSA](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/contributing-your-fhsa.html)
- [Tax deductions for FHSA contributions](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/tax-deductions-fhsa-contributions.html)
- [What happens if you contribute or transfer too much](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/what-happens-contribute-transfer-too-much.html)
- [Opening your FHSAs](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/opening-your-fhsas.html)
- [Withdrawals and transfers out of your FHSAs](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/withdrawals-transfers-out-your-fhsas.html)