TFSA, RRSP or FHSA: which should newcomers use first?
For most newcomers the TFSA comes first: you get $7,000 of room for 2026 if you are a resident aged 18 or older with a SIN, but no room for years before you became a resident. RRSP room is based on your previous year's Canadian earned income, so it is usually zero in your first year. If you plan to buy your first home, open an FHSA early: you can add $8,000 a year, up to $40,000.
TFSA
Room starts in the year you become a resident of Canada and are at least 18. The limit for 2026 is $7,000. You do not get room for earlier years when you lived elsewhere, so check your room in CRA My Account before contributing large amounts. Over-contributing costs 1% of the excess per month.
RRSP
RRSP room is 18% of your previous year's earned income in Canada, up to the annual maximum. Because it depends on Canadian income you have already reported, most newcomers have little or no room in their first year. Your notice of assessment shows your room after you file your first tax return.
FHSA
You can open an FHSA if you are a resident, at least 18 and a first-time home buyer, meaning you did not live in a home you owned (including one abroad) in the current year or the previous four years. You can contribute $8,000 a year, up to $40,000 in total. Room only starts once you open the account, so opening one early helps even if you contribute later.
I owned a home in Hong Kong. Can I open an FHSA?
Only if you did not live in a home you owned during the current year or the previous four calendar years. Homes outside Canada count for this test.
Do I get TFSA room for the years before I moved to Canada?
No. TFSA room only builds from the year you become a resident of Canada (and are at least 18).
Official sources
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