First Home Savings Account 2025 contribution limits

Since the release of the First Home Savings Account (FHSA), many Canadians planning to buy a home opened an account to begin accumulating contribution room. The amount you can contribute to your FHSA this year could be based on what you contributed in previous years. Here are some contribution limit considerations:
How will my 2025 FHSA contribution limit be calculated this year?
Your contribution room this year depends on what you contributed last year. Your personal contribution room is calculated as:
2025 contribution room ($8,000)
- Contributions already made this year
+ Any contribution room carried over from last year
Does FHSA room carry forward?
The FHSA rules allow you to carry-forward up to one year's worth of contributions, or $8,000. The actual amount of contribution room you have this year depends on several factors, such as:
- If you did not open an FHSA before December 31, of last year, you have no contribution carry-forward room. Your contribution limit for this year will be $8,000 once you open your FHSA account.
- If you have opened an FHSA before this year, and contributed the full $8,000 every year since opened, then your contribution room this year will be $8,000.
- If you have opened an FHSA before this year and have not contributed the full $8,000 every year, your contribution room this year will be the sum of all unused contribution room from previous years to a maximum of $8,000, plus $8,000 for this year.
How will my FHSA contribution room be calculated for next year?
You could lose some contribution room if you contribute less than $8,000 before the end of this year. Since the maximum carry-forward amount is $8,000, if you opened an FHSA two or more years ago but did not contribute to it, and you don’t contribute at least $8,000 this year, you will forfeit some room.
What happens when I lose FHSA contribution room?
The impact of lost contribution room on your home purchase goal depends on when you plan to purchase a home (your time horizon). Since the FHSA can remain open for 15 years, if you have a longer time horizon, you still have an opportunity to contribute the maximum $40,000. If you plan to purchase a home in the next five years, however, you may not be able to maximize your FHSA room before you purchase your home.
Your FHSA contribution room will be reported on your Notice of Assessment (NOA) after opening your FHSA account.
What if I overcontribute to my FHSA?
The Government of Canada charges a 1% per month penalty on overcontributions. The 1% is calculated against the highest amount above the contribution limit every month until it is withdrawn.
If you overcontribute to an FHSA, you will need to make a "designated withdrawal.” The amount you designate to withdraw must be equal to your overcontribution.
If the reason for an excess amount in your FHSA is from a transfer from your Registered Retirement Savings Plan (RRSP), you will need to transfer a designated amount back to your RRSP (instead of making a designated withdrawal).
In other words, excess funds in an FHSA need to go back to their original source. Designated withdrawals and transfers are not taxable and are not reported as income.
Are FHSA contributions tax deductible?
FHSA contributions can be deducted from your taxable income. Similar to RRSPs, you can save tax deductions generated by FHSA contributions for future years. This can be beneficial if you expect to be in a higher income tax bracket in the future.
Unlike RRSPs, you cannot deduct FHSA contributions made in the first 60 days of the year against the previous year's taxable income. If you contribute early in the year, your options are to deduct it against current year's income or carry forward the deduction to future years.
Funds transferred from your RRSP to your FHSA will use FHSA contribution room but will not generate a new tax deduction. This is because you already received a tax deduction when you contributed funds to your RRSP.
When can I withdraw funds from my FHSA?
There is no minimum investment period for the FHSA. However, short-term trading fees may apply depending on the underlying investment chosen.
How are FHSA contributions and withdrawals reported for tax purposes?
The T4FHSA tax reporting slip reports all transactions associated with your FHSA. Contributions, transfers from RRSPs, qualifying withdrawals, and taxable withdrawals are all included on the T4FHSA.
If you make a contribution or withdrawal, you should receive your T4FHSA towards the end of February every year. Actual delivery dates depend on your FHSA provider.
We can help
Speak and set up an appointment with an Edward Jones advisor to learn more about how a First Home Savings Account can help you achieve your home purchase goal, and how it fits your overall financial strategy.
Important Information:
Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.