Most year-end tax advice is about how much to put in. For someone who arrived recently, the more valuable move is cheaper: open the right accounts before 31 December, because one of them only starts earning room once it exists.
The FHSA: room starts when the account does
A First Home Savings Account lets you save for a first home with both halves of the tax benefit: contributions are deductible like an RRSP, and a qualifying withdrawal to buy a home is tax-free like a TFSA.
The numbers for 2026:
| FHSA | |
|---|---|
| Annual room | $8,000 |
| Lifetime limit | $40,000 |
| Unused room carried into next year | up to $8,000 |
| When room starts | the year you open the account |
That last row is the year-end point. FHSA room does not accrue until you open one. Open it on 31 December 2026 and put nothing in, and you still have $8,000 of 2026 room. In 2027 you could contribute $16,000: this year's carried-forward $8,000 plus next year's $8,000. Wait until January and the 2026 room never exists.
Who can open one: a Canadian resident, at least 18 (some providers require 19 in provinces where that is the age of majority), and a first-time home buyer. That means you did not live in a home you owned in the current year or the previous four calendar years, and neither did your spouse or partner. Most newcomers who rent here qualify. If you owned and lived in a home abroad within that window, sources disagree on whether it counts against you, so check with the CRA before relying on it.
You can contribute now and deduct later. FHSA deductions can be carried forward. In your arrival year your Canadian income may be partial and your tax rate low. You can contribute this year and save the deduction for a later year when your rate is higher.
If you never buy, the money can move to an RRSP without using RRSP room, and the account must close within 15 years of opening.
The TFSA: the room is already yours
Tax-Free Savings Account room works the other way round. It accrues for every year you are 18 or older and a Canadian tax resident, whether or not you have an account. The 2026 limit is $7,000, and it is not prorated: arrive on 1 December and you still have the full $7,000 for 2026.
What you do not get is the earlier years. The $109,000 cumulative figure you will see quoted applies only to someone who has been resident and an adult since 2009. A 2026 arrival starts at $7,000. Your exact room is in your CRA My Account; use that number, not one quoted to you.
So the TFSA has no 31 December opening deadline. Its room is waiting either way. Open one now anyway, so that the money you are already saving earns tax-free.
The order that still applies
This does not change the order in TFSA and RRSP when you might not stay:
- Emergency fund first, in plain savings. When your status has an expiry date, this is not optional. See the emergency fund guide.
- Any employer RRSP match next. It is free money.
- Then the TFSA for flexibility, and the FHSA if buying a home in Canada is a real plan.
Opening an FHSA with nothing in it does not jump this queue. It costs nothing and only preserves the room.
If you might leave
Both accounts have a trap for people whose plans could change:
- TFSA: contributing after you stop being a Canadian tax resident is penalised at 1% a month on that money. Keep the account if you leave; stop paying into it.
- FHSA: a tax-free withdrawal requires that you are a Canadian resident and buying a home in Canada. If you leave, you lose the tax-free home withdrawal. The money can still move to an RRSP or come out as taxable income.
Neither is a reason not to open the account. Both are reasons to cancel any automatic contributions the week your residency changes.
Where to open them
Every major bank and brokerage offers both accounts. What matters is that the account exists by 31 December and that you are not paying fees to hold cash.
Wealthsimple is a referral link, and we are paid for it. Open an account through it and deposit at least $100 from another bank within 30 days, and you get $25. We get a referral bonus too: $75 under Wealthsimple's standard 2026 terms, and more during its occasional boost promotions. Those are Wealthsimple's numbers, and its terms page is the one that counts. Check there which account types qualify before you rely on the bonus.
Before you click:
- The bonus is small next to the room. Opening any FHSA by 31 December is worth up to $8,000 of future deductions. Use whichever provider you will actually keep using.
- Investing is a separate decision from opening. An FHSA or TFSA can hold cash or a savings product. Money for a home purchase in two years should not be in the stock market, whatever the account is called.
Sources
FHSA eligibility, limits, carryforward and participation rules are from the Canada Revenue Agency's FHSA pages. The TFSA limit and non-prorated room are from CRA guidance as summarised by Fidelity Canada and Steadyhand for 2026. Non-resident rules are from CRA guidance and published bank FHSA guides. Wealthsimple's referral terms are from its 2026 referral promotion page as reported by Finder Canada. All of it was read on 2026-10-11. Contribution limits are set annually and partners change their terms; the CRA and Wealthsimple pages are the ones that count.
Not tax advice, and this is a referral page as disclosed above. If your situation includes property abroad or a planned departure, a tax professional is worth the fee. Every paid link on this site, with what we receive from each, is listed on one page.