How Far Does the FHSA Get a Toronto First-Time Buyer in 2026?

Quick answer: A First Home Savings Account (FHSA) lets each first-time buyer put in up to $8,000 a year, to a lifetime total of $40,000, with a tax deduction going in and no tax coming out on a qualifying withdrawal. A couple’s two full FHSAs hold $80,000, enough for the minimum down payment on a home up to about $1,050,000 in Toronto. Add the RRSP Home Buyers’ Plan, up to $60,000 each, and a couple can bring up to $200,000 of their own contributions.

In Toronto the FHSA is a real head start, not the whole down payment. The other thing Toronto buyers need to know is that “first-time buyer” means three different things depending on who’s asking, and two of them decide your land transfer tax.

How does the FHSA work?

You can open one if you’re a resident of Canada, at least 18, and a first-time home buyer under the CRA’s test: you haven’t lived in a home you, your spouse or your common-law partner owned, as your main home, this year or in the previous four calendar years (CRA).

Your room is $8,000 in the year you open your first FHSA. After that, it’s $8,000 a year plus unused room from the year before, up to $8,000 of carry-forward, to a lifetime limit of $40,000 (CRA). Room only starts the year you open the account, so open it early even if you put nothing in yet.

You can use it with the RRSP Home Buyers’ Plan on the same home (CRA). The Home Buyers’ Plan lets you take up to $60,000 from your RRSP, repaid over 15 years (CRA). A qualifying FHSA withdrawal never has to be repaid.

How far does it go at Toronto prices?

The minimum down payment is 5% of the first $500,000 and 10% of the rest, on homes under $1.5 million. At $1.5 million and above there’s no mortgage insurance, so the minimum is 20% (CMHC). Here’s how a couple’s savings compare, counting contributions only, with no investment growth.

Purchase price	Minimum down payment	Two full FHSAs ($80,000)	FHSAs + Home Buyers’ Plan (up to $200,000)
$700,000	$45,000	Covered	Covered
$1,000,000	$75,000	Covered	Covered
$1,200,000	$95,000	$15,000 short	Covered
$1,500,000	$300,000 (20%)	$220,000 short	$100,000 short

Up to about $1,050,000, two full FHSAs reach the minimum. Above that you need more, and at $1.5 million the 20% rule changes the picture completely. For more on the down payment rules, see 5% vs 20% down in Toronto.

A full FHSA takes time: at $8,000 a year it’s five years from opening the account. If you’re buying sooner, the Home Buyers’ Plan and other savings carry more of the load.

Who counts as a first-time buyer in Toronto?

That depends on which program you’re asking about, and the difference can cost thousands.

Program	First-time buyer means	Source
FHSA	You haven’t lived in a home you or your partner owned this year or in the previous four calendar years	CRA
RRSP Home Buyers’ Plan	The same four-year test	CRA
Ontario land transfer tax refund (up to $4,000)	You’ve never owned a home anywhere in the world, and your spouse hasn’t owned one while you were together	Ontario
Toronto land transfer tax rebate (up to $4,475)	The same never-owned test	City of Toronto

So if you sold a home six years ago and have rented since, you can open an FHSA and use the Home Buyers’ Plan, but you pay the full land transfer tax on both levels.

On a $700,000 condo, Ontario and Toronto each charge $10,475, for $20,950 in total (Ontario, City of Toronto). A buyer who has never owned gets $8,475 back and pays $12,475. A returning buyer pays all $20,950. On a $1,000,000 home it’s $24,475 versus $32,950. Budget for the right one. For the full list of closing costs, see Toronto closing costs.

When doesn’t this apply?

If you’ve lived in a home you or your partner owned in the last four years, you can’t open an FHSA yet. If you don’t end up buying, the FHSA isn’t wasted: you can transfer it to your RRSP or RRIF with no tax at the time (CRA). The account has a time limit, though, and must be closed by the end of the year of the 15th anniversary of opening your first FHSA, the year you turn 71, or the year after your first qualifying withdrawal, whichever comes first (CRA). The figures here are contributions only; your tax refund depends on your bracket.

What should you do next?

Open the FHSA now if you qualify, even with nothing in it, so the room starts building. Then let’s work out which Toronto price range your savings actually reach, and whether you qualify for the land transfer tax rebates. Book a 20-minute call with Joshua Tagg.

This is commentary, not tax or financial advice. Rules and figures as of October 26, 2026. Tax rates are set by the Province of Ontario and the City of Toronto. Talk to your accountant about your own tax situation. All mortgages are subject to lender and insurer approval.