Financial Tool

FHSA Eligibility: Don’t Miss Your Chance to Qualify

Jun 27, 2025

For many young Canadians, the dream of buying a first home can feel far away. High home prices and rising living costs make it tough to save for a down payment. But there’s good news: a new savings tool called the First Home Savings Account (FHSA) could help you get there faster. It’s designed to support people just like you—first-time home buyers who need a boost. But before you get too excited, there’s one important thing you need to know: not everyone qualifies. That’s why understanding FHSA eligibility is so important. In this post, we’ll break it all down so you don’t miss your chance to take advantage of this helpful program.

What Is the FHSA?

The First Home Savings Account (FHSA) is a special type of savings account created by the Canadian government to help people save for their first home. It combines the best features of both RRSPs (Registered Retirement Savings Plans) and TFSAs (Tax-Free Savings Accounts). Here’s how it works:

Contributions are tax-deductible (like an RRSP)
Savings grow tax-free inside the account
Withdrawals are also tax-free when used to buy a qualifying first home

It’s a powerful tool—but only if you’re eligible. That’s why understanding FHSA eligibility is key. Let’s look at the requirements in more detail.

Who Is Eligible for an FHSA?

To open and contribute to an FHSA, you must meet certain conditions. These rules are in place to make sure the account supports those it was designed for: first-time buyers who are planning to live in the home they purchase. Here’s what you need to qualify:

Age: You must be at least 18 years old and no older than 71.
Residency: You must be a Canadian resident for tax purposes.
First-time buyer status: You must not have lived in a home that you owned, either on your own or jointly with someone else, in the current year or the previous four years.

That last part is really important. If you’ve owned property recently—even if it was with a family member or spouse—you may not meet the FHSA eligibility rules. Double-check your situation before opening an account.

Common Misunderstandings About FHSA Eligibility

It’s easy to assume you qualify for an FHSA, but some small details could affect your status. For example:

Inherited homes: If you inherited property but didn’t live in it, you might still qualify.
Living with parents: You can still qualify as long as you haven’t owned any part of the home.
Co-signing: If you co-signed a mortgage but weren’t listed as an owner, you might be eligible.

Make sure you look at your full history of ownership, even informal ones. If you’re not sure, consider speaking with a financial advisor or using a government tool to check your FHSA eligibility.

What Happens If You Open an FHSA and Aren’t Eligible?

Opening an FHSA when you’re not eligible can lead to some serious consequences. If you make contributions without qualifying:

You might face penalty taxes on your contributions.
Your withdrawal could be disqualified, meaning it’s taxed like income.
The CRA could charge interest or other penalties on improper use.

That’s why it’s important to be honest and informed about your status. If you open an FHSA by mistake, contact the bank or financial institution right away. They may be able to help you correct the error before the penalties add up.

Know Before You Save

The First Home Savings Account is a fantastic way to grow your down payment faster—but only if you qualify. Make sure you meet the FHSA eligibility rules before you open an account or make contributions. Being informed now can save you time, stress, and money later. If you’re unsure, ask a trusted expert or do more research using official government resources. With the right steps, the path to your first home can be smoother than you think.

Let your savings work for you—but don’t miss your chance to qualify.