Transfers between FHSAs and other registered plans
Generally, you can transfer property from your registered retirement savings plans (RRSPs) to your first home savings accounts (FHSAs) without any immediate tax consequences, as long as it is a direct transfer, and does not exceed your unused FHSA participation room at the time of the transfer. You can also transfer property from your FHSA to your other FHSAs, or to your RRSPs or registered retirement income funds (RRIFs) without any immediate tax consequences, as long as it is a direct transfer, and other conditions are met where necessary.
On this page
How much you can transfer
Your FHSA participation room for the year is the maximum amount that you can contribute to your FHSAs or transfer from your RRSPs to your FHSAs in the year without creating an excess FHSA amount . For more information, go to Participating in your FHSAs.
What is a direct transfer
- A direct transfer is a transfer completed directly between the financial institutions of the two plans or accounts involved. To complete a direct transfer, you must fill out a transfer form and give it to your financial institution.
- Financial institutions do not have to use the forms referenced on this page. The institution that transfers your amounts may use other types of documents to record the transfer. The institution has to provide you with confirmation of the details of the transfer.
- In order to make a direct transfer, you must not withdraw the property yourself and contribute it to another one of your plans or accounts. Those transactions would not be considered a direct transfer and would cause unintended tax consequences.
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Example – Amounts transfered directly
Amy opened an FHSA in June 2023. Amy’s FHSA participation room for 2023 was $8,000 because this was the first year she opened an FHSA.
She read on the Canada Revenue Agency (CRA) web pages that she can transfer amounts directly from her RRSPs to her FHSAs.
In July 2023, Amy decided to transfer $5,000 from her RRSP to her FHSA. She filled out Form RC720, Transfer from your RRSP to your FHSA and brought it to her financial institution so that the amount would be transferred directly. The transfer was completed in the same month.
- Since it was a direct transfer and the transfer amount did not exceed Amy’s unused FHSA participation room, there are no immediate tax consequences.
- Amy cannot claim an FHSA deduction on her 2023 income tax and benefit return for $5,000 because it is a direct transfer from her RRSP, which is not deductible.
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Example – Amounts not transfered directly
K.G opened an FHSA in April 2023. K.G’s FHSA participation room for 2023 was $8,000 because this was the first year he opened an FHSA.
In August 2023, K.G decided to move $6,000 from his RRSP to his FHSA. K.G did not fill out Form RC720, Transfer from your RRSP to your FHSA for a direct transfer. Instead, he made a $6,000 withdrawal from his RRSP and contributed the same amount to his FHSA on the same day.
- Since the transaction was not a direct transfer, the $6,000 that K.G withdrew from his RRSP would be treated as a normal RRSP withdrawal, and must be included as RRSP income on his 2023 income tax and benefit return.
The $6,000 would be treated as a contribution (not a transfer) to K.G’s FHSA, which would reduce his unused FHSA participation room.
- K.G would be permitted to claim an FHSA deduction of up to $6,000 for the 2023 tax year.
Transfers from your RRSPs to your FHSAs
Generally, you can transfer property from your RRSPs to your FHSAs without any immediate tax consequences, as long as it is a direct transfer and does not exceed your unused FHSA participation room at the time of the transfer. For more information on how to complete a direct transfer, go to What is a direct transfer.
To complete a direct transfer from your RRSPs to your FHSAs, fill out Form RC720, Transfer from your RRSP to your FHSA and give it to your financial institution.
You cannot transfer property from your RRIF to your FHSA.
It should be noted that while contributions to your FHSAs can be deductible on your income tax and benefit return, any transfers from your RRSPs to your FHSAs are not deductible. For more information, go to Tax deductions for FHSA contributions.
The transfer of property from your RRSPs to your FHSAs will not restore your unused RRSP deduction room .
If the total of your contributions to your FHSAs and transfers from your RRSPs to your FHSAs exceeds your FHSA participation room for the year, you will have an excess FHSA amount. For more information, go to What happens if you contribute or transfer too much to your FHSAs.
If you have RRSP excess contributions at the time of the transfer from your RRSPs, special rules will apply. These rules will be available at a later date.
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Example – Transfers from an RRSP to an FHSA – Amounts transferred directly
On October 20, 2023, Mikaela opened an FHSA. Mikaela’s FHSA participation room was $8,000 because this was the first year she opened an FHSA.
Mikaela fills out Form RC720, Transfer from your RRSP to your FHSA to complete a direct transfer from her RRSP to her FHSA and gives it to her RRSP issuer .
On November 1, 2023, Mikaela completes a direct transfer of $5,000 from her RRSP, which has a balance of $15,000, to her FHSA. Mikaela’s FHSA balance is now $5,000 and her RRSP balance is now $10,000.
Since it is a direct transfer and the transfer amount did not exceed Mikaela’s unused FHSA participation room, there are no immediate tax consequences.
- Mikaela cannot claim an FHSA deduction on her 2023 income tax and benefit return, because it is a direct transfer from her RRSP, which is not deductible.
Mikaela’s unused FHSA participation room after the transfer is $3,000.
- plus $8,000 (FHSA participation room for 2023)
- –minus $5,000 (direct transfer from her RRSP)
- =equals $3,000 (unused FHSA participation room for 2023)
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Example – Transfers from an RRSP to an FHSA – Amounts not transferred directly
Cheska opened an FHSA in April 2023. Cheska’s FHSA participation room for 2023 was $8,000 because this was the first year she opened an FHSA.
Cheska read on the CRA web pages that individuals can directly transfer property from their RRSPs to their FHSAs, as long as it does not exceed their unused FHSA participation room at the time of the transfer.
- Cheska did not fill out Form RC720, Transfer from your RRSP to your FHSA to complete a direct transfer from her RRSP to her FHSA.
Instead, Cheska withdrew $8,000 from her RRSP in August 2023, and contributed $8,000 to her FHSA on the same day. Cheska did not make any other contributions or transfers to her FHSA for the rest of the year.
Since Cheska did not complete a direct transfer, the $8,000 that she withdrew from her RRSP is treated as a taxable withdrawal, which must be included as income on her income tax and benefit return for 2023. The $8,000 is also treated as a contribution to Cheska’s FHSA in August 2023.
Cheska reported $8,000 as RRSP income, and claimed the maximum FHSA deduction of $8,000 when she filed her income tax and benefit return for 2023.
Transfers between your FHSAs
A transfer from one of your FHSAs to another of your FHSAs can be made without any immediate tax consequences, as long as it is a direct transfer. For more information on how to complete a direct transfer, go to What is a direct transfer.
To complete a direct transfer between your FHSAs, fill out Form RC721, Transfer from your FHSA to your FHSA, RRSP or RRIF and give it to your financial institution.
If you make a direct transfer between your FHSAs, the transfer will not reduce your unused FHSA participation room.
If you withdraw the property from your FHSA yourself and contribute the same property to another FHSA of yours, this transaction would not be considered a direct transfer and there will be tax consequences. The amount that you withdraw from your FHSA would be a taxable withdrawal, which you must report as income when you file your income tax and benefit return for the year of the withdrawal. The amount will also be treated as a new contribution to your other FHSA, which will reduce your unused FHSA participation room in the year of the new contribution.
If the amount of the new contribution exceeds your unused FHSA participation room at the time of the new contribution, you will have an excess FHSA amount . For more information about excess FHSA amounts, go to What happens if you contribute or transfer too much to your FHSA.
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Example – Transfers between your own FHSAs – Amounts transferred directly
Patrick opened an FHSA in April 2023. Patrick’s FHSA participation room for 2023 was $8,000 because this was the first year he opened an FHSA.
On May 5, 2023, Patrick contributed $8,000 to his FHSA in Bank A, reducing his unused FHSA participation room to zero. Patrick did not make any other contributions to his FHSAs or transfers from his RRSPs to his FHSAs for the rest of the year.
In July 2023, he received his FHSA statement from Bank A, which showed that there was only minimal growth of $25 in his FHSA. Patrick decided to talk to other financial institutions to see if they could offer a better rate of return for his FHSA investment. Patrick found a better rate offered at another financial institution and decided to transfer the property from his FHSA with Bank A to an FHSA he opened with Bank B.
For Patrick’s FHSA transfer to have no tax consequences:
- Bank A must complete a direct transfer of the property to Bank B
- Patrick must not withdraw the property himself, but must fill out Form RC721, Transfer from your FHSA to your FHSA, RRSP or RRIF and bring it to his financial institution in order to complete the direct transfer
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Example – Transfers between your own FHSAs – Amounts not transferred directly
Lito opened FHSAs with Bank A and Bank B in April 2023. Lito’s FHSA participation room for 2023 was $8,000 because this was the first year he opened an FHSA.
When he opened the FHSAs, Lito contributed $2,000 to his FHSA with Bank A, and $1,000 to his FHSA with Bank B. In June 2023, Bank B offered Lito a higher interest rate on his FHSA investments.
Lito decided that it would be better if he moved all of the property from his FHSA with Bank A to his FHSA with Bank B. As of June 2023, the fair market value (FMV) of Lito’s FHSA with Bank A increased to $2,100.
- Lito did not fill out Form RC721, Transfer from your FHSA to your FHSA, RRSP or RRIF to do a direct transfer.
Instead, he withdrew $2,100 from his FHSA with Bank A in June 2023 and contributed the same amount to his FHSA with Bank B in July 2023. He did not make any other contributions or transfers to either of his FHSAs for the rest of the year.
Since it was not a direct transfer between Lito’s FHSAs, the $2,100 that he withdrew from his FHSA with Bank A would be a taxable withdrawal. Lito must report $2,100 as income when he files his 2023 income tax and benefit return.
Likewise, the $2,100 will also be treated as a new contribution to Lito’s FHSA with Bank B in July 2023, which will reduce his unused FHSA participation room.
At the end of 2023, Lito would have used up $5,100 of his FHSA participation room for the year.
- plus $2,000 (FHSA contribution with Bank A in April 2023)
- +plus $1,000 (FHSA contribution with Bank B in April 2023)
- +plus $2,100 (FHSA contribution with Bank B in July 2023)
- =eqauls $5,100 (total FHSA participation room used for 2023)
- Lito would be permitted to claim an FHSA deduction of up to $5,100 for the 2023 tax year.
His unused FHSA participation room is $2,900.
- plus $8,000 (FHSA participation room for 2023)
- –minus $5,100 (FHSA contributions in 2023)
- =eqauls $2,900 (unused FHSA participation room for 2023)
Transfers from your FHSAs to your RRSPs or RRIFs
You will be allowed to transfer property from your FHSAs to your RRSPs or RRIFs without any immediate tax consequences, as long as it is a direct transfer and you do not have an excess FHSA amount.
Generally, an amount that is transferred directly from your FHSAs to your RRSPs or RRIFs will not impact your unused RRSP deduction room or your unused FHSA participation room. For more information on how to complete a direct transfer, go to What is a direct transfer.
To complete a direct transfer from your FHSAs to your RRSPs or RRIFs, fill out Form RC721, Transfer from your FHSA to you FHSA, RRSP or RRIF and give it to your financial institution.
If you have an excess FHSA amount at the time of the transfer from your FHSAs to your RRSPs or RRIFs, the maximum amount you can transfer and avoid tax consequences is the total FMV of your FHSAs minus the excess FHSA amount.
- plus Total FMV of your FHSAs
- –minus Excess FHSA amount
- =eqauls Maximum amount you can transfer and avoid tax consequences
In particular, if you transferred the total FMV of your FHSAs (including the excess FHSA amount), you must include the excess FHSA amount as income on your income tax and benefit return for the year of the transfer. The excess FHSA amount would also be treated as a new RRSP contribution, which would reduce your unused RRSP deduction room and could result in RRSP excess contributions in certain cases.
If the amount is directly transferred from your FHSAs to your RRIFs, it will also be considered as a new RRSP contribution with similar consequences as noted above.
If you withdraw the property from the FHSA yourself, this will not be considered a direct transfer and there will be tax consequences. The amount that you withdraw from your FHSA would be a taxable withdrawal and you must report it as income in the year of the withdrawal when you file your income tax and benefit return.
In addition, the amount would be treated as a new RRSP contribution and would reduce your unused RRSP deduction room and could result in RRSP excess contributions in certain cases.
Property transferred to an RRSP or RRIF from an FHSA will be subject to the usual rules applicable to RRSPs and RRIFs. When amounts are later withdrawn from the RRSPs or RRIFs, the amounts withdrawn will have to be included as income in the year received on your income tax and benefit return. For more information, go to Registered Retirement Savings Plan (RRSP) and Registered Retirement Income Fund (RRIF).
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Example – Transfer from an FHSA to an RRSP – Amounts transferred directly
Anthony opened his FHSA in 2023. Over the years, he contributed the maximum amount to his FHSA, reaching his lifetime FHSA limit of $40,000 in 2027. It is now 2038, and Anthony must close his account by December 31, 2038, since it will reach the maximum participation period of fifteen years on that date. Anthony does not have an excess FHSA amount.
Anthony fills out Form RC721, Transfer from your FHSA to your FHSA, RRSP or RRIF and asks his financial institution to do a direct transfer of all the property in his FHSA to his RRSP and to close his FHSA once the property has been transferred.
- Since it is direct transfer and Anthony has no excess FHSA amount, there are no tax consequences and there will be no impact on his unused RRSP deduction room.
After the transfer is completed on August 28, 2038, the property from Anthony’s FHSA that is now in his RRSP will be subject to the normal RRSP rules. If Anthony decides to withdraw amounts (which may include this amount) from his RRSP at a later date, the rules on withdrawing amounts from his RRSP will apply.
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Example – Transfer from an FHSA to an RRSP – Amounts not transferred directly
Sean opens an FHSA in April 2023 and makes a yearly $2,000 contribution to his account. Sean does not have an excess FHSA amount.
In September 2030, the FMV of Sean’s FHSA is $20,000 and he decides to move $5,000 from his FHSA to his RRSP. Sean does not fill out the Form RC721, Transfer from your FHSA to your FHSA, RRSP or RRIF to complete a direct transfer from his FHSA to his RRSP. Sean withdraws $5,000 from his FHSA and contributes the same amount to his RRSP on the same day.
- Since it is not a direct transfer, the $5,000 that Sean withdraws from his FHSA would be a taxable withdrawal. Therefore, Sean must report this amount as income for the 2030 tax year when he files his income tax and benefit return.
The $5,000 will also be treated as a new contribution to Sean’s RRSP, which will reduce his unused RRSP deduction room, and will be subject to the normal RRSP rules.
Transfers from a spousal or common-law partner RRSP
Generally, you can transfer property from your spousal or common-law partner RRSPs to your FHSAs. However, you are not permitted to make a transfer from your spousal or common-law partner RRSP to your FHSAs if your spouse or common-law partner contributed any amounts to any spousal or common-law partner RRSP in the same year as the transfer or in the two previous calendar years. If no contributions were made by your spouse or common-law partner during this period, the normal RRSP to FHSA transfer rules apply.
The transfer of property from your spousal or common-law partner RRSPs to your FHSAs will not restore your or your spouse's or common-law partner’s unused RRSP deduction room.
To complete a direct transfer from your spousal or common-law partner RRSPs to your FHSAs, fill out Form RC720, Transfer from your RRSP to your FHSA and give it to your financial institution.
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Example – Transfer from a spousal RRSP (no tax consequences)
Hanif contributed $5,000 to Sanjida’s RRSP as a spousal RRSP contribution in April 2020.
In June 2023, Sanjida decides to open an FHSA. She wants to maximize her FHSA on that same day. Sanjida's FHSA participation room for 2023 is $8,000 because this is the first year she opens an FHSA. Sanjida decides to contribute $3,000 to her FHSA and fills out Form RC720, Transfer from your RRSP to your FHSA to directly transfer $5,000 from her spousal RRSP to her FHSA. Since the spousal RRSP contributions were made in 2020, Sanjida can transfer the amount from her spousal RRSP into her FHSA with no immediate tax consequences.
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Example – Transfer from a spousal RRSP (unintended tax consequences)
Saul contributes $5,000 to Carla’s spousal RRSP in April 2023.
In June 2023, Carla decides to open an FHSA. She wants to maximize her FHSA on that same day. Carla's FHSA participation room for 2023 is $8,000 because this is the first year she opens an FHSA. Carla would like to contribute $3,000 and directly transfer $5,000 from her spousal RRSP to her FHSA. Carla would be able to contribute $3,000 to her FHSA, but in order to avoid unintended tax consequences, she has to wait until at least January 1, 2026, to make a transfer from her spousal RRSP.
Making designated transfers from your FHSAs
If you contribute or transfer to your FHSAs more than your FHSA participation room for the year, you will have an excess FHSA amount. Generally, you have to pay a tax equal to 1% of the highest excess FHSA amount in the month, for each month that the excess remains in the account.
When you have an excess FHSA amount, you will continue to pay the monthly 1% tax until the excess FHSA amount is eliminated.
If you have an excess FHSA amount, one of the ways that you can reduce or eliminate your excess FHSA amount is to make a designated transfer . For more information, go to What happens if you contribute or transfer too much to your FHSAs.
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