Making a qualifying withdrawal
A qualifying withdrawal is the payoff of the FHSA: money comes out tax-free, including all investment growth, and it is never repaid. But the CRA's conditions are all-or-nothing. If any condition is not met at the time of the withdrawal, the withdrawal is treated as a taxable withdrawal and included in your income for the year. You are responsible for making sure every condition is met, so work through this list before you ask your issuer for the money.
Every condition, in order
| Condition | What it means |
|---|---|
| First-time home buyer at withdrawal | You did not live in a qualifying home you owned or jointly owned as your principal residence in the current calendar year before the withdrawal (except the 30 days immediately before it) or in the previous 4 calendar years. Note: unlike the opening test, this test does not count a spouse's home. |
| Written agreement | You have a written agreement to buy or build a qualifying home, with the acquisition or construction completion date before 1 October of the year following the year of withdrawal. |
| Not bought too early | You must not have acquired the qualifying home more than 30 days before making the withdrawal. |
| Resident of Canada | You must be a resident of Canada from the time of your first qualifying withdrawal until the earlier of acquiring the home or your death. |
| Principal residence intention | You must occupy, or intend to occupy, the home as your principal place of residence within one year after buying or building it. |
| Form RC725 | You must fill out Form RC725, Request to Make a Qualifying Withdrawal from your FHSA, and give it to your FHSA issuer. |
What counts as a qualifying home
A qualifying home is a housing unit located in Canada, including homes being constructed. It includes single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, apartments in duplexes, triplexes, fourplexes, or apartment buildings, and a share in a co-operative housing corporation that entitles you to own and gives you an equity interest in a housing unit. A share that only gives you a right to tenancy does not qualify. You can make more than one qualifying withdrawal for the same home, and you can withdraw some or all of the property in your FHSAs, including investment growth.
Three traps in the timing
First, the 1 October deadline runs from the year after withdrawal, not from the purchase: a withdrawal in 2026 needs an acquisition or construction completion date before 1 October 2027. Second, the 30-day rule cuts both ways: you cannot withdraw long after you have already bought, and you cannot withdraw before you have the written agreement. Third, a qualifying withdrawal cannot be cancelled once made. If the purchase falls through and you put the money back into your FHSA, that re-contribution counts as a new contribution, uses room, and is not deductible for any year.
Buying with a partner
Each qualifying person can make their own qualifying withdrawal from their own FHSA for the same home, provided each meets all the conditions. A couple who both qualify can therefore use two FHSAs, up to $40,000 of lifetime contributions each plus growth, toward one purchase. The partner who is not a first-time buyer does not block the qualifying partner's withdrawal.
Sources: Canada Revenue Agency, Withdrawals and transfers out of your FHSAs (qualifying withdrawal conditions, qualifying home list, Form RC725, no cancellation).