First Home Savings Account: Must You Close It After Buying a Home?

The First Home Savings Account (FHSA) allows eligible first-time home buyers to make tax-deductible contributions of up to $8,000 annually, subject to a $40,000 lifetime maximum. Qualifying withdrawals to purchase a first home are tax-free.

A May 14, 2026 CRA Technical Interpretation addressed what happens when an individual acquires a qualifying home without making a qualifying FHSA withdrawal.

Does Acquiring a Home Automatically Close the FHSA?

No. Merely acquiring a qualifying home does not, by itself, end the maximum FHSA participation period. The period ends at the end of the year following the year in which the first specified event occurs: the 14th anniversary of opening the first qualifying FHSA, reaching age 70, or making the first qualifying withdrawal.

Acquisition can include receiving a home as a gift or inheritance, not only purchasing one. Subject to the applicable limits, contributions may continue while the FHSA remains open.

What About a Later Tax-Free Withdrawal?

Buying and occupying the first home may prevent a future qualifying withdrawal. Generally, the individual must meet the first-time home buyer condition when the later withdrawal is made, including not having owned and occupied a home as their principal residence during the relevant look-back period: the earlier part of that calendar year and the four preceding calendar years.

Can the Funds Be Transferred to an RRSP or RRIF?

Before the end of the maximum participation period, eligible FHSA funds that are not excess amounts can generally be transferred directly to an RRSP or RRIF on a tax-free basis, without using available RRSP deduction room. Acquiring a home without making a qualifying withdrawal does not remove that transfer option.

Action: After acquiring a home, review whether keeping the FHSA open, making a qualifying withdrawal or eventually transferring the funds is the most appropriate strategy.