How much tax does an FHSA contribution save in Ontario?

About $2,277 on $8,000 at $85,000 of income — the same mechanism as an RRSP, saving tax at your marginal rate of 29.65%.

How much can I put in an FHSA?

Your participation room in the first year you open one is $8,000. Contributions are generally deductible; transfers from an RRSP are not, since the deduction was already claimed on the way in.

Is an FHSA better than a TFSA for a house deposit?

For a qualifying first home, yes — the FHSA gives you a deduction the TFSA does not, worth about $2,277 on $8,000 here, and the withdrawal is still tax-free. The TFSA's advantage is that it is not conditional on buying anything.

What if I never buy a home?

The money can move to an RRSP without using RRSP room, at which point it behaves like an RRSP: taxed on the way out. You keep the deduction you already took; you lose the tax-free exit.

2026 · all 13 jurisdictions · CRA

FHSA calculator

The only registered account in Canada that gives you a deduction going in and takes nothing on the way out — provided you buy a first home with it.

Written and edited by Pablo Ruiz QuinteroSources checked September 1, 2026Limits and withholding rates read off canada.ca on 2026-09-07

Tax year 2026Where OntarioRuns in your browser

Your annual income

FHSA contribution

Province or territory

Tax you get back

$2,277

so $8,000 costs you $5,723

The arithmetic
Contribution	$8,000
Tax saved at 29.65% marginal	−$2,277
Net cost to you	$5,723
Room a year on this income generates	$15,300

The FHSA does what an RRSP and a TFSA each do half of

A contribution is deductible, like an RRSP: putting $8,000 in reduces your tax by about $2,277 at $85,000 of income in Ontario. And a qualifying withdrawal to buy a first home is tax-free, like a TFSA. No other registered account in Canada does both.

The participation room in the first year you open one is $8,000. Contributions are generally deductible and reduce your tax the same way an RRSP contribution does — but a transfer *from* an RRSP into an FHSA is not deductible, because the deduction was already taken.

Set against the Home Buyers' Plan, which lets you borrow from your own RRSP and repay it, the FHSA has no repayment at all. For a first-time buyer with room in both, it is usually the one to fill first.

The same $8,000 is worth twice as much to some people as to others

A deduction is worth your marginal rate, and marginal rates in Ontario run from the low twenties to the low fifties. So the identical $8,000 contribution comes back as very different amounts of money:

$45,000 of income — $1,408 back, at a marginal rate of 25.19%.

$70,000 of income — $2,251 back, at a marginal rate of 34.36%.

$110,000 of income — $2,545 back, at a marginal rate of 33.89%.

$175,000 of income — $3,598 back, at a marginal rate of 44.97%.

That spread is the argument for timing. If you expect a materially higher income next year — a promotion, a first full year of work, a bonus that lands in January — the room carries and the deduction does not expire the moment the money goes in. Contributing early and deducting later is allowed, and on the numbers above it is worth $2,189 between the two ends of that table.

The reverse also holds, and matters more than people expect: on a low income the deduction is worth so little that a TFSA, which asks for no deduction and imposes no conditions, is often the better home for a house deposit. The FHSA is not automatically the right account — it is the right account for someone who earns enough for the deduction to bite and is genuinely going to buy.

And where you live moves it by $743

Provincial tax stacks on federal tax, so a deduction saves you both. On $85,000 of income, $8,000 into an FHSA returns:

1. Nova Scotia — $2,855 back.

2. Prince Edward Island — $2,849 back.

3. Quebec — $2,765 back.

4. Newfoundland and Labrador — $2,688 back.

5. New Brunswick — $2,650 back.

6. Manitoba — $2,554 back.

7. Saskatchewan — $2,534 back.

8. Alberta — $2,342 back.

9. Ontario — $2,277 back.

10. Yukon — $2,266 back.

11. Northwest Territories — $2,235 back.

12. British Columbia — $2,166 back.

13. Nunavut — $2,112 back.

The gap between top and bottom is $743 on the same contribution and the same salary, and it is the province's own schedule doing all of it — the federal half of the saving is identical everywhere. Nova Scotia tops that list for the unglamorous reason that it taxes this income most heavily; a large refund is a symptom of a large bill, not a prize.

Move province between contributing and deducting and the figure that applies is the one for where you live on 31 December. That is the same rule the rest of the income tax system uses, and it catches people who move for work in the autumn.

FHSA, RRSP and TFSA side by side

FHSA — deduction going in, nothing taxed coming out for a qualifying home. $8,000 of room in the first year.

RRSP — deduction going in, fully taxed coming out. $15,300 of room on $85,000 of income, capped at $33,810.

TFSA — no deduction going in, nothing taxed coming out, for anything at all. $7,000 for 2026.

The FHSA only wins if you actually buy a first home; otherwise the money moves to an RRSP, at which point it behaves like one. That conditionality is the whole design — it is a housing policy wearing the clothes of a savings account.

Where these figures come from

Read off the CRA's own pages, with the date:

CRA — MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE — read 2026-09-07. https://www.canada.ca/en/revenue-agency/services/tax/registered-plans-administrators/pspa/mp-rrsp-dpsp-tfsa-limits-ympe.html

CRA — Tax rates on RRSP withdrawals — read 2026-09-07. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/making-withdrawals/tax-rates-on-withdrawals.html

CRA — First Home Savings Account (FHSA) — read 2026-09-07. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html

And what these figures do not cover:

— Your actual RRSP room is not 18% of this year's income. It is the room the CRA carries on your notice of assessment: unused room from previous years carries forward, and a pension adjustment from a workplace plan reduces it. The figure here is the room a year of this salary generates, not the room you have.

— The Home Buyers' Plan and the Lifelong Learning Plan let you withdraw from an RRSP without the withholding or the tax, provided you repay on schedule. Neither is modelled.

— A withdrawal permanently loses the contribution room it used. That is not a tax cost, so it does not appear in the figures — but it is the part that costs most over a lifetime.

— The FHSA lifetime limit and the rules for carrying unused room forward are not applied; the annual participation room in the first year is what is shown.

Where to go next

RRSP tax refund calculatorThe same deduction, without the tax-free exit.Land transfer taxThe other cost of a first home, and it cannot be financed.Canada income tax calculatorThe marginal rate the deduction is worth.All Canadian calculatorsSales tax, paycheque and the rest.

Questions

How much tax does an FHSA contribution save in Ontario?: About $2,277 on $8,000 at $85,000 of income — the same mechanism as an RRSP, saving tax at your marginal rate of 29.65%.
How much can I put in an FHSA?: Your participation room in the first year you open one is $8,000. Contributions are generally deductible; transfers from an RRSP are not, since the deduction was already claimed on the way in.
Is an FHSA better than a TFSA for a house deposit?: For a qualifying first home, yes — the FHSA gives you a deduction the TFSA does not, worth about $2,277 on $8,000 here, and the withdrawal is still tax-free. The TFSA's advantage is that it is not conditional on buying anything.
What if I never buy a home?: The money can move to an RRSP without using RRSP room, at which point it behaves like an RRSP: taxed on the way out. You keep the deduction you already took; you lose the tax-free exit.