Opening and closing your FHSAs
Find out who is eligible to open a first home savings account (FHSA), how to open an account, and when to close your accounts.
You can open an FHSA starting April 1, 2023.
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Who can open an FHSA
To open an FHSA, you must be a qualifying individual.
You are a qualifying individual if you meet all of the following requirements at the time the account is opened:
- 18 years of age or older
- a resident of Canada
- a first-time home buyer
In certain provinces and territories, the legal age at which an individual can enter into a contract (which includes opening an FHSA) is 19 years old.
If you become a non-resident of Canada after opening an FHSA, special rules will apply. For more information, go to Non-residents and FHSAs.
For the purpose of opening an FHSA, you will be considered to be a first-time home buyer if you did not, at any time in the current calendar year before the account is opened or at any time in the preceding four calendar years, live in a qualifying home (or what would be a qualifying home if located in Canada) as your principal place of residence that either:
- you owned or jointly owned
- your spouse or common-law partner (at the time the account is opened) owned or jointly owned
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Example – Opening an FHSA the year you turn 18
Bea is a Canadian resident who lives in a province where she is permitted to open an FHSA at the age of 18. Bea turns 18 on August 15, 2023. She will not be able to open an FHSA until that date. Once Bea turns 18, she can open an FHSA if she meets all of the eligibility criteria. Once Bea opens an FHSA, she will be able to contribute to her FHSA or transfer from her registered retirement savings plans (RRSPs) to her FHSA up to $8,000 in 2023.
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Example – Are you a first-time home buyer
Example 1
Aysha is a Canadian resident who is 29 years old. Aysha would like to open an FHSA on May 9, 2023. She became a joint owner of a home in 2022, which she used as her principal residence and sold in late 2022. Aysha is not considered to be a first-time home buyer because her principal residence was a home that she co-owned during the period from January 1, 2019 to May 9, 2023. As a result, Aysha is not a qualifying individual and will not be permitted to open an FHSA until at least 2027.
Example 2
Carlos is a Canadian resident who is 34 years old. Carlos would like to open an FHSA in June 2023. He currently lives with his common-law partner in a home that his common-law partner owns. Carlos is not considered to be a first-time home buyer because his current principal residence is owned by his common-law partner. As a result, Carlos is not a qualifying individual and will not be permitted to open an FHSA.
How to open an FHSA
Before you open an FHSA, you have to determine if you are a qualifying individual. For more information, go to Who can open an FHSA.
You can open an FHSA through an FHSA issuer such as a bank, credit union, or a trust or insurance company. Your issuer will advise you on the types of FHSAs and the qualified investments they can contain.
You can have more than one FHSA at any given time, but in order to avoid unintended tax consequences, the total amount you can contribute to all of your FHSAs and transfer from your RRSPs to all your FHSAs in a calendar year cannot be more than your FHSA participation room for that year.
To open an FHSA, you must do the following:
Contact your issuer
Provide the issuer with the information they need to register your FHSA, including:
- your social insurance number
- your date of birth
- any supporting documents your issuer may need to certify that you are a qualifying individual
If you do not provide the required information to the issuer, the issuer will not open an FHSA on your behalf.
If you provide information to the issuer and it is subsequently determined that you provided incorrect information, it is possible that the registration of your FHSA may be revoked as far back as the date on which it was opened.
The following will apply after the date of revocation:
- any contributions made to the account will not be tax-deductible
- any amounts transferred from your RRSPs to the account will be treated as an RRSP withdrawal and must be reported as income on your income tax and benefit return for the year of transfer
- any income earned under the account will not be tax-free and must be reported on your income tax and benefit return for the year it was earned
When you open your FHSAs, you may want to designate a beneficiary on your account. For more information, go to Types of beneficiaries.
Types of FHSAs
There are three types of FHSAs that can be offered:
- a depositary FHSA
- an account (with a financial institution) that holds money, term deposits, or guaranteed investment certificates (GICs)
- a trusteed FHSA
- a trust (with a trust company as trustee) that holds qualified investments such as money, term deposits, GICs, government and corporate bonds, mutual funds, and securities listed on a designated stock exchange
- an insured FHSA
- an annuity contract (with a licensed annuity provider)
Banks, insurance companies, credit unions and trust companies can be FHSA issuers which offer FHSAs.
For information about a type of FHSA, contact an FHSA issuer.
Self-directed FHSA
You can set up a self-directed FHSA if you prefer to build and manage your investment portfolio by buying and selling different types of qualified investments. For more information, contact an FHSA issuer.
When to close an FHSA
Your maximum participation period begins when you open your first FHSA and ends on December 31 of the year in which the earliest of the following events occur:
- the 15th anniversary of opening your first FHSA
- you turn 71 years of age
- the year following your first qualifying withdrawal from your FHSA
In order to avoid unintended tax consequences, you should close all of your FHSAs before your maximum participation period ends.
If you have any property in your FHSA on or before the end of your maximum participation period, generally you can directly transfer the property on a tax-deferred basis into your RRSPs or registered retirement income funds (RRIFs) . For more information about transfers, go to Transfers between FHSAs and other registered plans.
If you withdraw any remaining property as a taxable withdrawal, you must include this amount as income on your income tax and benefit return for the year the amounts are received. For more information about withdrawals from an FHSA, go to Withdrawals from your FHSAs.
If you have an excess FHSA amount before you close your FHSAs, go to What happens if you contribute or transfer too much to your FHSAs.
If property remains in your accounts after your maximum participation period ends, and they lose their status as FHSAs, you must include the fair market value (FMV) of all of the property in your FHSAs as of the end of the day on December 31 of that year, as income on your income tax and benefit return for that year.
After the death of the last FHSA holder , all FHSAs should be closed by the end of the exempt period. For more information, go to Closing the FHSAs after death.
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Example – Closing your FHSAs after 15 years
Amr opened his first FHSA in August 2023 at the age of 30. He made his first contribution in 2026 and continued making regular contributions until 2030. Amr did not make a qualifying withdrawal to buy a home at any point during his participation period. Even though he did not make a contribution until 2026, his maximum participation period will end on December 31, 2038, because he opened his first FHSA in 2023. Amr did not have an excess FHSA amount on December 31, 2038.
By December 31, 2038, Amr must either:
- directly transfer the property from his FHSA to his RRSPs or RRIFs
- withdraw the property from his FHSA. This withdrawal would be a taxable withdrawal and the amount received must be included as income on Amr's income tax and benefit return for 2038
If Amr does not withdraw or directly transfer the property from his FHSA and does not close his FHSA by December 31, 2038, the account will cease to be an FHSA. If the account ceased to be an FHSA, Amr must include the FMV of the property in his FHSA as of December 31, 2038, as income on his income tax and benefit return for 2038.
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Example – Closing your FHSAs at age 71
Sophia opened her first FHSA in June 2023 at the age of 60. She contributed to her FHSA each year and did not exceed her FHSA participation room for any year. Sophia did not make a qualifying withdrawal in any year. Her maximum participation period will end on December 31, 2034, as Sophia will turn 71 that year.
By December 31, 2034, Sophia must either:
- directly transfer the property from her FHSA to her RRSPs or RRIFs
- withdraw the property from her FHSA. This withdrawal would be a taxable withdrawal and the amount received must be included as income on Sophia’s income tax and benefit return for 2034
If Sophia does not withdraw or directly transfer the property from her FHSA and does not close her FHSA by December 31, 2034, the account will cease to be an FHSA. If the account ceases to be an FHSA, Sophia must include the FMV of the property in her FHSA as of December 31, 2034, as income on her income tax and benefit return for 2034.
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Example – Closing your FHSAs after making your first qualifying withdrawal
In May 2023, Pedro opened his first FHSA at the age of 33. He made regular contributions to his FHSA and did not exceed his FHSA participation room for any year. In 2029, Pedro decided to purchase a qualifying home and made a qualifying withdrawal for the full value of the account. Pedro’s maximum participation period will end on December 31, 2030, because he made his first qualifying withdrawal in 2029.
If Pedro makes any contributions after his first qualifying withdrawal in 2029, these contributions will not be tax-deductible.
If any property remains in the FHSA at the end of the maximum participation period in 2030, Pedro must either:
- directly transfer the property from his FHSA to his RRSPs or RRIFs
- withdraw the property from his FHSA. This withdrawal would be a taxable withdrawal and the amount received must be included as income on Pedro’s income tax and benefit return for 2030
If Pedro does not withdraw or directly transfer the property from his FHSA and close his FHSA by December 31, 2030, the account will cease to be an FHSA. If the account ceases to be an FHSA, Pedro must include the FMV of the property in his FHSA as of December 31, 2030, as income on his income tax and benefit return for 2030.
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