FHSA contribution room calculator

Only if you opened the account in an earlier year and left room unused. You get $8,000 of new room a year and can carry forward at most $8,000 of unused room, so $16,000 is the ceiling for any single year. Someone who opened their first FHSA this year can put in $8,000 and no more.

No, and this is the rule that costs people room. The carryforward stops at $8,000 however long you wait. Open an account and contribute nothing for three years and you arrive with $16,000 of room, not $32,000. The lifetime limit of $40,000 is still there, but you can only move $16,000 a year through it, so reaching the maximum takes at least three years of contributions.

No, and this is the single most expensive misunderstanding about the account. Unlike a TFSA, where room accrues from the year you turn 18 whether or not you have ever opened one, FHSA room only starts accruing once your first FHSA exists. Opening an account you do not fund still starts the clock, which is why the usual advice is to open one as soon as you are eligible even with a dollar in it.

December 31. The first-60-days grace period belongs to RRSPs alone: an FHSA contribution has to be in the account by the end of the calendar year to be deducted on that year's return. Contribute in January expecting it to count for last year and it will not.

For a first home it is generally better than both, because it is the only one that does both things: the contribution is deductible like an RRSP, and a qualifying withdrawal for a first home comes out completely tax-free like a TFSA. An RRSP withdrawal under the Home Buyers' Plan has to be paid back over 15 years; an FHSA withdrawal never does. The catch is the size, $40,000 lifetime, so most people use it alongside the other two rather than instead of them.

Nothing is lost, but the tax-free part is. You have 15 years from opening (or until the end of the year you turn 71), and at that point anything left can be transferred to an RRSP or RRIF without using any RRSP room, which is a genuinely good outcome: you got a deduction going in and you keep the tax shelter. Withdrawing it as cash instead makes the whole amount taxable income in that year.

Yes, and their room is completely separate. Contributing to an FHSA does not touch your TFSA room or your RRSP deduction limit. The one interaction worth knowing is that you can transfer from an RRSP into an FHSA, but the transfer is not deductible (you already deducted it) and it does not give back the RRSP room it used.

The CRA charges 1% per month on the excess for every month it stays in the account, the same penalty as a TFSA over-contribution and with no $2,000 buffer like an RRSP has. Because room depends on when you opened the account, which the CRA knows and you may not remember exactly, confirm the figure on your notice of assessment before contributing near the top of your room.