Zakah on Your FHSA — Canada's First Home Savings Account (2026)

The First Home Savings Account is new enough that most Canadian Muslims haven't seen a clear ruling on it. The good news is that it doesn't need a new principle — it follows the same rule that governs every restricted account: zakah tracks complete ownership (al-milk al-tamm), and complete ownership requires access without penalty.

Before You Withdraw

An FHSA is structured like a hybrid of an RRSP and a TFSA, but for zakah purposes what matters is that a non-qualifying withdrawal comes with real cost — the deposit was tax-deductible going in, so pulling it out for anything other than a qualifying home purchase (or a transfer into an RRSP) triggers taxation. That restriction means no annual zakah is due on an FHSA balance while it sits in the account.

At Withdrawal

When the account is actually accessed, pay 2.5% on the amount you receive. A qualifying withdrawal for a home purchase converts almost immediately into an illiquid asset — the home itself, which is a personal-use asset and not zakatable — so in practice there's often nothing left to count in that scenario. A non-qualifying withdrawal, by contrast, puts real cash in your hand: assess it like any other cash you receive.

If You Transfer Instead of Withdraw

If you transfer unused FHSA funds into an RRSP rather than withdrawing them, the money simply changes which restricted account it lives in. Follow the same rule that applies to RRSPs: no zakah while it remains restricted, and zakah assessed at the point it becomes genuinely accessible to you.

FAQ

I've had money sitting in my FHSA for three years. Do I owe zakah on those years now?

No. Restricted wealth does not accumulate a backlog of zakah obligations for each year it was inaccessible. The obligation attaches once, at the point access is gained — not retroactively for every prior year.

My FHSA holds invested funds, not cash. Does that change anything?

Not while it's restricted — the access question controls, not the asset type. Once the funds become accessible, treat any invested portion using the standard method for that asset (cash at face value, stock holdings via the CRI method).

Run your full zakah calculation at https://simplezakatguide.com/calculator.