Closing your FHSA

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Closing your FHSAs

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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 an excess FHSA amount before you close your FHSAs, go to What happens if you contribute or transfer too much to your FHSAs. 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.

Remove property before your FHSA closes

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 registered retirement savings plans (RRSP) or registered retirement income funds (RRIF). For more information on transferring property out of your FHSAs, go to Withdrawals and transfers out of your FHSAs.

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. Your FHSA issuer will give you a T4FHSA slip, First Home Savings Account Statement showing the amount of the taxable withdrawal in box 22. For more information on taxable withdrawals from an FHSA, go to Withdrawals and transfers out of your FHSAs.

If property remains in your accounts after your maximum participation period ends, they lose their status as FHSAs. You must then 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. Your FHSA issuer will give you a T4FHSA slip showing the amount deemed received on FHSA cessation in box 26.

Example – Closing your FHSAs after 15 years

Amr opens his first FHSA in August 2023 at the age of 30. He makes his first contribution in 2026 and continues making regular contributions until 2030. Amr does not make a qualifying withdrawal to buy a home at any point during his participation period. Even though he does 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 does not have an excess FHSA amount in 2038.

By December 31, 2038, Amr should either:

  • directly transfer the property from his FHSAs to his RRSPs or RRIFs
  • withdraw the property from his FHSAs. 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

On December 1, 2038, Amr decides to transfer all property from his FHSAs to his RRSP and close all of his FHSAs. Amr fills out Form RC721, Transfer from your FHSA to your FHSA, RRSP, or RRIF, and gives the form to his RRSP issuer. The FMV of all of his FHSAs at the time of transfer is $15,000.

Amr is not required to report any amount on his 2038 income tax and benefit return because all of the property from his FHSAs is directly transferred to his RRSP before December 31, 2038, and he does not have an excess FHSA amount at the time of the transfer.

Example – Closing your FHSAs at age 71

Sophia opens her first FHSA in June 2023 at the age of 60. She contributes to her FHSAs each year and does not exceed her FHSA participation room for any year. Sophia does 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. Sophia does not have an excess FHSA amount in 2034.

By December 31, 2034, Sophia should either:

  • directly transfer the property from her FHSAs 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

On December 17, 2034, Sophia decides to withdraw all property from her FHSAs. The FMV of all of her FHSAs at the time of withdrawal is $10,000. Sophia closes all of her FHSAs on December 18, 2034.

Sophia's FHSA issuer gives her a T4FHSA slip for 2034 showing a taxable withdrawal of $10,000 in box 22. Sophia reports $10,000 as income when she files her 2034 income tax and benefit return.

Example – Closing your FHSAs after making your first qualifying withdrawal

In May 2023, Pedro opens his first FHSA at the age of 33. He makes regular contributions to his FHSA and does not exceed his FHSA participation room for any year. In 2029, Pedro decides to purchase a qualifying home and makes 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 should 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

Pedro closes his FHSA on December 31, 2030. The FMV of his FHSA on December 31, 2030 is $0. As a result, Pedro does not report any FHSA related property on his 2030 income tax and benefit return.

Example – Not closing your FHSAs at the end of your maximum participation period

Jungkook opens his first FHSA in October 2023 at the age of 25. He regularly makes contributions to his FHSA and transfers from his RRSPs to his FHSA each year and does not exceed his FHSA participation room for any year.

In September 2032, Jungkook decides to purchase a qualifying home and makes a qualifying withdrawal of $8,000 from his FHSA. Jungkook takes possession of his home in November 2032 and does not make any other qualifying withdrawals, leaving property in his FHSA.

Jungkook’s maximum participation period will end on December 31, 2033, because he made his first qualifying withdrawal in 2032.

If Jungkook makes any contributions after his first qualifying withdrawal in 2032, these contributions will not be tax-deductible.

By December 31, 2033, Jungkook should 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 Jungkook's income tax and benefit return for the year received

Jungkook forgets to close his FHSA on or before December 31, 2033. As a result, his FHSA will lose its status as an FHSA as of this date. The FMV of his FHSA on December 31, 2033 is $5,000.

Jungkook's FHSA issuer gives him a 2033 T4FHSA slip showing $5,000 as an amount deemed received on FHSA cessation in box 26. Jungkook reports $5,000 as income on his 2033 income tax and benefit return.

Any income earned on Jungkook's account after it loses its status as an FHSA will be taxable in the year in accordance with normal taxation rules.

How to close your FHSA

In order to close your FHSA, you must:

  1. Contact your FHSA issuer
  2. Follow your issuer's instructions on how to close your FHSA

Your FHSA issuer will provide you with confirmation details once your FHSA has been closed.

Your FHSA issuer will provide information to the Canada Revenue Agency (CRA) confirming that you closed your FHSA. You do not need to send any confirmation to the CRA that you closed your FHSA, unless the CRA asks to see it.


Advantage



Allowable FHSA deduction



Annual FHSA limit



Annuitant



Common-law partner



Designated amounts



Excess FHSA amount



Exempt period



Fair market value (FMV)



FHSA carryforward



FHSA deduction



FHSA participation room



First-time home buyer



Holder



Issuer



Lifetime FHSA limit



Maximum participation period



Non-qualified investment



Property



Qualified donee



Qualified investment



Qualifying home



Qualifying individual



Qualifying withdrawal



Registered retirement income fund (RRIF)



Registered retirement saving plan (RRSP)



Spouse



Successor holder



Survivor



Unused FHSA contributions



Unused FHSA participation room



Unused RRSP deduction room



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Date modified:
2024-04-10