What is an FHSA?
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A first home savings account is a registered plan for a qualifying first home. Contributions can be deducted on your return, in the same broad way as an RRSP contribution. A qualifying withdrawal to buy or build a first home is not taxed. Money that comes out for another reason generally is.
You open an FHSA at a bank, credit union, or other issuer. The CRA’s conditions include being at least 18, being a resident of Canada, and meeting the first-time buyer test. A province can set a different age for opening an account. This site does not decide whether you qualify.
Room, carryforward, and the lifetime cap
In the year you open your first FHSA, participation room is $8,000. In later years you generally receive another $8,000, plus unused room carried forward. Carryforward is capped at $8,000, so room in a later year can reach $16,000 but not more than that from carryforward alone. Lifetime contributions cannot pass $40,000.
The FHSA calculator applies those three limits to a planned annual contribution. It does not know transfers from an RRSP, which also use participation room.
Methodology
Limits in this guide are the CRA amounts cited above. The guide does not model a taxable withdrawal, a transfer to an RRSP, or the deduction you could claim at your own marginal rate beyond the sketch in the calculator.