FHSA Eligibility: Opening the Account and Using It

Who can open an account

The CRA calls someone who can open an FHSA a qualifying individual. On the day the account opens you need to meet all of these:

• You're at least 18, or 19 where that is the age at which your province or territory lets you sign a contract.
• You're 71 or younger at the close of the calendar year in which you open it.
• You're resident in Canada.
• You haven't lived, this calendar year or in the previous four, in a home you owned or jointly owned as your principal residence.
• You have no spouse or common-law partner, or you haven't lived in a home they owned or jointly owned as your principal residence during that same period.

The five-year look-back is what lets former owners back in. Someone who sold a condo and moved out in 2021, and has rented ever since, looks back over 2022 to 2026 when opening an account this year and finds nothing there. Someone living in a house their partner owns doesn't qualify while that continues, even though their own name is on no deed.

What counts as a home

The rules speak of a qualifying home: a housing unit in Canada, already built or under construction. Single-family and semi-detached homes, townhouses, mobile homes, condominium units and apartments in duplexes, triplexes, fourplexes or larger buildings all count. A share in a housing co-operative counts when it gives you ownership and an equity interest in a unit; a share that only lets you live there as a tenant doesn't. Both eligibility tests also count a home outside Canada that would qualify if it were here.

The withdrawal test is narrower

When you withdraw for a purchase, the CRA asks only about homes you owned or jointly owned and lived in, in the current year before the withdrawal or the four calendar years before that. Your spouse's or partner's home drops out of the question. So does the stretch of 30 days immediately before the withdrawal, which leaves room to take possession of the new place a few weeks before the money comes out.

Conditions for a qualifying withdrawal

Meet all of these and the withdrawal is tax-free, never needs repaying, and can be taken as one payment or several:

• You're a first-time home buyer under the withdrawal test above.
• You have a written agreement to buy or build a qualifying home, with the purchase or construction completed before October 1 of the year after the withdrawal.
• You didn't acquire the home more than 30 days before withdrawing.
• You stay resident in Canada from the first qualifying withdrawal until you acquire the home, or until death if that comes first.
• You live in the home, or intend to, as your principal residence within a year of buying or building it.
• You've given your FHSA issuer Form RC725, Request to Make a Qualifying Withdrawal from your FHSA.

Money doesn't have to sit in the account for any minimum period before it can come out this way. Two buyers of the same home can each make a qualifying withdrawal from their own FHSA if each meets the conditions, and an FHSA withdrawal can be combined with the Home Buyers' Plan from an RRSP for the same home.

When a condition fails

Responsibility for meeting the conditions sits with you, not the institution. If one turns out not to have been met when the money came out, the whole withdrawal becomes taxable income for that year, and the CRA reassesses the return if it has already been processed. A qualifying withdrawal also can't be undone the way a Home Buyers' Plan withdrawal sometimes can: putting the money back counts as a brand-new contribution, which uses room and may create an excess amount. One more consequence is easy to miss: the first qualifying withdrawal starts the account's end date, which falls on December 31 of the following year. What's still in it by then goes to an RRSP or RRIF or comes out as taxable income. The FHSA calculator shows the room you have before that point and what each contribution saves in tax.