Nadia's offer on an Ottawa home is accepted. Her next thought is to move the FHSA balance into her chequing account for closing. Before pressing the transfer button, she calls the issuer to arrange a qualifying withdrawal.
An ordinary withdrawal is not automatically tax-free because a home purchase is nearby on the calendar.
Check the conditions at withdrawal
Eligibility to open an FHSA and eligibility to make a qualifying withdrawal use different first-time-buyer tests.
For the withdrawal test, Nadia must not have lived in a home she owned or jointly owned as her principal residence during the four previous calendar years or the current year before the withdrawal, excluding the 30 days immediately before it. This includes a home outside Canada.
She checks her own ownership and occupancy history; the account's opening approval does not settle the withdrawal test.
- She needs a written agreement to buy or build a qualifying home in Canada, with acquisition or completion before October 1 of the following year.
- She must not have acquired the home more than 30 days before the withdrawal.
- She must be a Canadian resident when she first withdraws and remain so until acquisition if she has not yet acquired the home.
- She must occupy or intend to occupy it as her principal residence within one year after buying or building it.
For a withdrawal in 2026, the agreement must provide for acquisition or completed construction by September 30, 2027. Nadia compares those dates before requesting the money. If construction or closing changes, she checks the consequences before treating the old plan as still valid.
Use the issuer's qualifying-withdrawal process
Nadia completes Form RC725 and gives it to the FHSA issuer. She confirms how much time the issuer needs and whether investments must be sold first. That operational timing matters when a closing payment is due on a fixed date.
She keeps the request and confirmation, then checks the T4FHSA information after year-end. A qualifying withdrawal is not an HBP loan: it does not carry an HBP repayment schedule.
Put the account's closing date in the file
The first qualifying withdrawal sets a closing deadline for all her FHSAs: December 31 of the following year, unless the age-71 or 15-year participation limit ends sooner. A first qualifying withdrawal in 2026 therefore normally means closing every FHSA by December 31, 2027. The purchase deadline and account-closing deadline are different dates.
After any qualifying withdrawals are complete, money left in the account needs an eligible direct-transfer or taxable-withdrawal decision before closure. Contributions made after the first qualifying withdrawal are not deductible. Nadia records the closing deadline and checks every issuer rather than leaving a small forgotten balance behind.
