If buying your first home is on your list of goals, there’s one step worth considering before the year ends, even if you’re still years away from house hunting.
Opening a First Home Savings Account (FHSA) before December 31 could give you more room to save next year. And if you already own your home, this may be a good reminder to pass along to your adult children.
Why opening an account now can help
A FHSA lets you save for a first home with two benefits: contributions are generally tax-deductible, and qualifying withdrawals are tax-free. You can contribute up to $8,000 annually, to a lifetime maximum of $40,000.
The detail that’s easy to miss is that contribution room only starts building once you open your first account.
For example:
| • | Open a FHSA in 2026 and contribute nothing, and you could have $16,000 in available room in 2027. |
| • | Wait until January 2027 to open one, and you would start with $8,000 that year. |
So, even if you don’t have money to put aside right now, opening an account could give you a head start. Just remember that you can carry forward a maximum of $8,000 in unused room; it doesn’t keep building indefinitely.
Could your children benefit, too?
If your children are starting to earn and save, they may be eligible to open a FHSA, provided they’re Canadian residents, meet the first-time buyer requirements and are at least 18, or 19 in some provinces and territories.
If you’d like to help, you can gift money for them to contribute, within their available room, and they can claim the tax deduction.
Before opening an account, consider their likely buying timeline, since doing so starts the FHSA’s maximum 15-year participation period.
A few tips before December 31
If you already have a FHSA, remember that December 31 is the contribution deadline for a deduction for that tax year. Unlike RRSPs, contributions made early next year can’t be deducted for the previous year.
You can also save the deduction for later. If you’re studying or early in your career, claiming it in a future year when you earn more may be more valuable.
Whenever you decide to contribute, check your available room first and, if you’re aiming for a year-end contribution, allow a little extra time for your financial institution to process it.
Don’t forget your TFSA and RRSP
If you’re already planning a TFSA withdrawal, taking it in December means that contribution room becomes available again on January 1. Just be careful about putting the money back before then, as you’ll need enough unused room to avoid an overcontribution.
You have more time to contribute to your RRSP: contributions made in the first 60 days of 2027 can still count toward your 2026 tax deduction, provided you have enough contribution room.