First Home Savings Account (FHSA) withdrawals

A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed.

Types of homes that qualify include:

• single-family,
• semi-detached,
• townhouses,
• mobile homes,
• condo units, and
• apartments (this includes duplexes, triplexes, fourplexes, or larger apartment buildings).

A share in a co-operative housing corporation also qualifies if it entitles you to possession and gives you an equity interest in a housing unit located in Canada.

The following example illustrates how an FHSA withdrawal might work for a typical first-time homebuyer. Your specific situation may vary based on individual circumstances.

Background: Sarah is 32 and lives in Winnipeg, Manitoba. She’s never owned a home and opened her FHSA in January 2025 and contributed the full annual amount ($8,000) as soon as she opened the account.

Home purchase: In May, Sarah signed an agreement to buy a condominium unit in downtown Winnipeg, with a closing date of August 15, 2025.

Intent to occupy: She plans to move in and make this condo her principal residence immediately after closing. Her first deposit is due in June.

Contributions and growth: Sarah invested in a conservative fund and by June, the fund had grown to $8,120.

Withdrawal: In June, Sarah submitted CRA Form RC725 (“Request to Make a Qualifying Withdrawal”) to her FHSA issuer, along with her signed purchase agreement. A few days later, she received the full $8,120 – completely tax-free and with no repayment required.

Next steps: After her August closing, Sarah has until December 31, 2026 to close her FHSA and withdraw any remaining funds using one of the three FHSA withdrawal options.

When you make a taxable withdrawal, your FHSA issuer will automatically deduct the withholding tax from your withdrawal and pay it to the government on your behalf.

But keep in mind, the amount that’s withheld upfront might not be the full amount you owe.

You’ll pay tax on the withdrawal based on your marginal tax rate, which depends on your total taxable income and the province you live in. That amount is calculated when you file your taxes for the year.

At that time, you may owe more tax, or you might get some of the withholding tax back as a refund. It all depends on how much you withdrew and where you live:

Yes. There’s no waiting period. This means you can contribute to your FHSA and withdraw those funds for a qualifying home purchase even within the same year, or weeks later, without any waiting period penalty.

The tax deduction for your contribution still counts, and the withdrawal will be tax-free if it’s a qualifying withdrawal.

No. Unlike a Tax-Free Savings Account (TFSA), withdrawals from an FHSA don’t reinstate contribution or deduction room the following year.

No. You don’t have to withdraw all your FHSA funds at once. You can choose to withdraw it all at once in one lump sum or make multiple withdrawals.

But remember, once you make your first qualifying withdrawal, you must withdraw or transfer to your RRSP or RRIF all remaining funds by December 31 of the following year. To be tax-free, each withdrawal needs to meet the qualifying withdrawal conditions above.

No. You don’t have to repay funds into your FHSA after you make qualifying withdrawals to buy a qualifying home.

Yes. See FHSA withdrawal options. Keep in mind the withdrawal may be taxable.

Yes. The FHSA and a Home Buyer’s Plan (HBP) are two separate programs and using one doesn’t prevent you from using the other on the same qualifying home.