Non-residents and FHSAs
There are some limitations to how you may participate in your FHSA if you become a non-resident of Canada.
If you become a non-resident after opening an FHSA
If you become a non-resident of Canada after you open your FHSA, you can continue to participate normally in your FHSA, with one exception:
- You cannot make a qualifying withdrawal to build or buy a qualifying home while you are a non-resident of Canada.
One of the requirements of a qualifying withdrawal is that you must be a resident of Canada throughout the period that begins with the date of the first qualifying withdrawal and ends with the date of acquisition of the qualifying home.
If you are a non-resident of Canada, any taxable withdrawal from your FHSA will be subject to withholding tax in the year of withdrawal. All distributions you receive from a deceased holder’s FHSA as a beneficiary will also be subject to withholding tax. For more information on beneficiary distributions, go to Death and FHSAs.
The withholding tax is 25% for non-residents of Canada, unless reduced by a treaty. For more information, go to Information Circular IC76-12, Applicable rate of part XIII tax on amounts paid or credited to persons in countries with which Canada has a tax convention.
Your FHSA issuer or the deceased FHSA holder’s issuer will give you an NR4 Statement of Amounts Paid or Credited to Non-Residents of Canada showing the taxable withdrawals from your FHSA in box 74, the distributions you receive from a deceased holder’s FHSA as a beneficiary in box 75, and the amount deemed received on FHSA cessation in box 76. For more information on filing non-resident returns, go to Non-residents of Canada.
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