Problems, reviews, and frequently asked questions
Most FHSA problems fall into a small set of patterns. This page collects them, with the fix for each, and answers the questions first-time buyers ask most.
Common problems and fixes
| Problem | Likely cause and fix |
|---|---|
| Excess amount and monthly 1% tax | Contributions plus RRSP transfers exceeded the year's room. Stop contributing, and eliminate the excess with a designated withdrawal or designated transfer (Form RC727), or a taxable withdrawal. |
| Cannot open an FHSA | The opening test counts a spouse's owned home you live in. Check the four-year window, or open before moving into a partner-owned home. |
| Withdrawal taxed unexpectedly | A condition failed: no written agreement, bought more than 30 days before, missed the 1 October deadline, or not a qualifying home. A failed qualifying withdrawal is taxable income. |
| Money moved to a TFSA taxed | Direct transfers to a TFSA are not allowed. The move is a taxable FHSA withdrawal plus a new TFSA contribution. |
| Room statement looks wrong | A return was not filed or not assessed since opening. File all returns, including Schedule 15 for the opening year, and check the CRA account. |
| Purchase fell through after withdrawal | A qualifying withdrawal cannot be cancelled. Re-contributing counts as a new, non-deductible contribution that uses room. |
| Account still open after the period ended | Amounts in a ceased FHSA are deemed received and taxed. Transfer directly to an RRSP or RRIF before the period ends and close the account. |
Frequently asked questions
Can I open an FHSA if I owned a home before?
Yes, if you have not lived in a home you owned as your principal residence in the current calendar year or the preceding four calendar years. Previous owners can requalify.
Can I use the FHSA and the Home Buyers' Plan together?
Yes, for the same qualifying home, if you meet all the conditions at the time of each withdrawal. The FHSA withdrawal is never repaid; the HBP withdrawal is repaid over 15 years.
What if I never buy a home?
Transfer the balance directly to your RRSP or RRIF tax-free on Form RC721, or withdraw it as taxable income. Do it before the maximum participation period ends.
Does my spouse's home affect my withdrawal?
No. The withdrawal test counts only homes you owned or jointly owned. The opening test is the one that counts a spouse's home, and the two tests are different.
Is there a deadline for contributions?
Yes: 31 December of the calendar year. There is no 60-day rule for the FHSA, unlike an RRSP.
Can I hold more than one FHSA?
Yes, but the participation room is shared across all of them. Two accounts do not double your room.
What happens to FHSA money if I die?
The FHSA rules include special provisions for death, including a possible successor holder where a spouse or common-law partner survives. This is a complex area: get tax advice promptly, and check the CRA's life-events guidance for FHSAs rather than assuming the balance simply transfers.
Sources: Canada Revenue Agency, Withdrawals and transfers out of your FHSAs; Canada Revenue Agency, Participating in your FHSAs; Canada Revenue Agency, Life events and FHSAs.