Nadia opened an FHSA while saving for a first home. After comparing housing costs with her plans to change jobs, she decides to keep renting. She wonders whether she must immediately empty the account and repay every tax deduction.
Changing her housing plans is a reason to review the account, not to make a rushed withdrawal.
Find the actual participation deadline
The FHSA's maximum participation period ends on December 31 of the earliest applicable year: the year of the 15th anniversary of opening the first FHSA, the year the holder turns 71, or the year after the first qualifying withdrawal.
Opening another FHSA does not restart the clock. Nadia records the first account's opening date and checks all issuers, including an account she no longer actively uses.
If she has not made a qualifying withdrawal and is still within her participation period, deciding to rent does not by itself require immediate closure. She reviews whether keeping the account fits her plans and the account's rules.
Compare the two exit routes
If a home purchase is no longer the intended use, an eligible direct transfer to her own RRSP or RRIF can generally preserve tax deferral without using RRSP room. That route needs the institution's transfer process and a check for any excess FHSA amount.
An ordinary cash withdrawal is generally taxable. Nadia compares the cash she needs now with the effect on her annual income before choosing it. Neither route should be confused with a qualifying tax-free home-purchase withdrawal.
Finish the account administration
Nadia asks about processing times before the closing deadline. She keeps confirmations and verifies that all intended accounts are actually closed after their balances move.
She also retains the opening, contribution and tax-reporting history. A changed purchase plan does not erase those records. The practical decision is what to do with the remaining savings and when, using the rules that apply to the chosen route.
