The First Home Savings Account

The FHSA is the only registered account that is deductible going in and tax-free coming out. For a first-time buyer it beats both the TFSA and the RRSP, which is why the planner's "where should my next $10,000 go?" comparison puts it first regardless of the rate path.

The rules

$8,000 per year, with one year of unused room carried forward — so at most $16,000 in any single year.
$40,000 lifetime.
Contributions are deducted from income, like an RRSP.
A qualifying withdrawal for a first home is tax-free and does not have to be repaid.
The participation period ends at the earliest of: the 15th anniversary of opening, the end of the year you turn 71, or the year after your first qualifying withdrawal. Whatever is left rolls into an RRSP without using RRSP room.

What the engine does

Tracks room, including the single year of carryforward, and warns when a contribution is trimmed to fit.
Values the deduction as a refund the following April, at your own marginal rate, rather than netting it against the month's tax. That is when the money actually arrives.
Rolls the balance into an RRSP when the participation period ends, and warns if it had to wind up as taxable income instead.
Refuses to deduct a contribution made after a qualifying withdrawal, which the rules do not allow (a defect found and fixed 2026-08-30).
Assumes a withdrawal you flag is a qualifying one — the engine knows your dates, not your history, so eligibility is asserted rather than verified.

What it deliberately does not

Death, marriage breakdown, becoming a non-resident, a failed qualifying withdrawal and RRSP-to-FHSA transfers are all unmodelled. Research: docs/research/2026-08-30-fhsa-rollovers-and-exits.md.

Sources

CRA — First Home Savings Account (PRIMARY where reachable; corroborated-secondary otherwise) · FHSA: $8,000 annual limit; $40,000 lifetime; unused room carries forward ONE year only (max $16,000 in a single year); non-qualifying withdrawal = ordinary income with RRSP-style withholding; qualifying-home closing deadline = end of year following first withdrawal · effective 2023-04-01

CRA — Tax deductions for FHSA contributions (corroborated-secondary: canada.ca returned 403 to automated fetch; wording via search index, concordant with Investment Executive) · FHSA contributions are deductible from income for the contribution year or a future year (RRSP-like); lifetime deduction maximum $40,000; unclaimed deductions carry forward indefinitely; transfers in from an RRSP are NOT deductible · effective 2023-04-01

CRA — Withdrawals and transfers out of your FHSAs · FHSA maximum participation period ends Dec 31 of the year of the EARLIEST of: 15th anniversary of opening the first FHSA; turning 71; the year following the first qualifying withdrawal. Property left at period end loses FHSA status and its fair market value becomes taxable income unless directly transferred · effective 2023-04-01

CRA — Withdrawals and transfers out of your FHSAs (worked example: "no tax consequences and there will be no impact on his unused RRSP deduction room") · Unused FHSA property may be transferred directly to an RRSP or RRIF (Form RC721) on a tax-deferred basis; the transfer does not use RRSP deduction room and does not reduce it · effective 2023-04-01