- How much can I put into an FHSA this year?
- $8,000 of new room a year, plus up to $8,000 of unused room carried forward from last year — so no single year ever accepts more than $16,000, and $40,000 is the lifetime ceiling. The calculator works your own number out from the year you opened the account and what you have already contributed. Growth on top of the $40,000 is yours and uses no room: the lifetime limit counts contributions, not balance.
- Does the FHSA have the same 60-day rule as an RRSP?
- No, and this is the mistake almost every article makes. An RRSP contribution in the first 60 days of a year can be claimed against the previous year. An FHSA contribution cannot — 31 December is the deadline, full stop. $8,000 deposited on 2 January is deductible a whole tax year later, so at a 30.5% marginal rate that is $2,440 of refund arriving twelve months after you expected it.
- Do I get contribution room for the years before I opened the account?
- No. Room starts accumulating in the year you open your first FHSA and there is nothing retroactive about it. Because only $8,000 of unused room ever carries forward, there is no catching up afterwards either: the earliest any FHSA can hold a full $40,000 of contributions is its fifth year, and opening a year late moves that milestone a year late with it. The tool shows you the year yours gets there.
- How much is the tax deduction actually worth?
- Your marginal rate times what you put in. It is a deduction against income, not a credit, so $8,000 at a 30.5% combined federal and provincial marginal rate is about $2,440 — and somebody in a lower band gets less for the same deposit. You can also carry the deduction forward and claim it in a later, higher-income year: the money has to go in on time, the paperwork does not have to be used on time.
- When does my FHSA have to be closed?
- At the end of the earliest of three years, not the latest: 15 years after you opened it, the year you turn 71, or the year after your first qualifying withdrawal. Enter the year you opened it and the year you were born and the tool shows your own deadline. Whatever is left in the account then can be moved to an RRSP or a RRIF without using RRSP room; taken in cash instead, it is taxed as income.
- What happens if I never end up buying a home?
- A withdrawal is tax free only if it qualifies — you need a written agreement to buy or build a qualifying home in Canada, and you must not have lived in a home you owned in the current calendar year or the four preceding ones. A withdrawal that does not qualify is taxed as ordinary income and the room is gone permanently; it does not come back the following January the way TFSA room does. Moving the balance into an RRSP instead is the usual way out. All of this is arithmetic, not advice — a tax question goes to a tax preparer.