A tax-free FHSA withdrawal depends on two separate tests: the property has to be a qualifying home, and you have to be a first-time home buyer. This page covers both. The other withdrawal conditions (the written agreement, the timing around closing, residency and Form RC725) are on FHSA withdrawal rules. For the account as a whole, see the FHSA guide or the FHSA guides directory.
The conditions for a qualifying withdrawal
A tax-free FHSA withdrawal needs you to be a first-time buyer at the time, have a written agreement to buy or build a home in Canada by October 1 of the next year (and not have bought it more than 30 days before the withdrawal), stay a Canadian resident until you buy it, intend to live in it within a year, and give your FHSA issuer Form RC725. Each condition is explained in FHSA withdrawal rules; the rest of this page covers the home and first-time buyer tests.
What counts as a qualifying home
CRA defines a qualifying home as a housing unit located in Canada, either existing or under construction. You must intend to occupy it as your principal residence within one year after buying or building it.
| Property type | Qualifies? | Notes |
|---|---|---|
| Single-family home | Yes | |
| Semi-detached home or townhouse | Yes | Freehold or condominium |
| Condominium unit | Yes | Including a unit still under construction |
| Apartment in a multi-unit building | Yes | For example, one unit of a duplex, triplex or fourplex that you live in |
| Mobile home | Yes | |
| Co-operative housing share | Yes, with an equity interest | The share must give you an equity interest in the housing |
| New build on land you own | Yes | With a written agreement to build |
| Cottage or vacation property | Only as a principal residence | If you won’t live there within a year, it doesn’t qualify |
| Rental property you won’t live in | No | Fails the occupancy condition |
| Commercial property | No | Not a housing unit |
| Home outside Canada | No | Must be located in Canada |
The CRA’s test is that you occupy, or intend to occupy, the home as your principal place of residence within one year after buying or building it. Owning other property doesn’t disqualify the purchase, as long as this is the home you intend to live in.
The first-time home buyer test
The FHSA uses a look-back of the current calendar year and the previous 4 calendar years. The test is applied twice, and the two versions differ:
| When you open an FHSA | When you make a qualifying withdrawal | |
|---|---|---|
| Whose homes count | Homes you owned or jointly owned, and homes your spouse or common-law partner owned, if you have one when you open | Only homes you owned or jointly owned |
| Period | This calendar year and the previous 4 | This calendar year before the withdrawal (ignoring the 30 days just before it) and the previous 4 |
| What disqualifies | Having lived in such a home as your principal residence | Having lived in such a home as your principal residence |
| Homes abroad | Count, if they would be a qualifying home in Canada | Count, if they would be a qualifying home in Canada |
Two things follow. Ownership alone doesn’t disqualify you: what counts is having lived in the home as your principal residence. And homes outside Canada count too, since CRA’s wording covers a home “or what would be a qualifying home if located in Canada”; that matters for newcomers who owned a home before moving here.
Examples
| Situation | First-time buyer? |
|---|---|
| Never owned a home | Yes |
| Owned a home and lived in it, then sold and moved out before the look-back window | Yes |
| Own a rental property you have never lived in | Yes |
| Owned and lived in a home abroad within the look-back window | No, until the window passes |
| Owned and lived in a home in Canada within the look-back window | No, until the window passes |
| At opening: your spouse owns the home you both live in | No (you can’t open an FHSA) |
| At withdrawal: you opened while single and now live in your new spouse’s home | Yes, for the withdrawal test, since only your own homes count |
The partner scenarios are worked through in detail on opening an FHSA when your partner owns a home, and how two qualifying partners combine their accounts is on the FHSA for couples.
Edge cases
Pre-construction condos. A written agreement with the builder meets the agreement condition, but the home must be acquired or completed before October 1 of the year after the withdrawal. With a long build, withdrawing too early can put the completion date outside that window, so the timing of the withdrawal matters.
Buying with someone who isn’t your spouse. A friend’s or relative’s status doesn’t affect yours. Each person’s FHSA withdrawal depends only on their own first-time buyer status.
A home you inherited. If you owned an inherited home and lived in it as your principal residence, it counts like any other home you owned, for the look-back period. An inherited property you never lived in doesn’t.
If the purchase falls through. CRA’s FHSA withdrawal page doesn’t set out a specific rule for a purchase that collapses after a qualifying withdrawal. It does say a qualifying withdrawal can’t be cancelled once it’s made, and putting the money back counts as a new contribution, which can create an excess if you don’t have the room. If it happens, ask CRA how the withdrawal will be treated and keep the documents from the failed deal.
Qualifying vs taxable: the difference
If either test fails, the withdrawal is taxable rather than qualifying. At a 40% marginal rate, a $40,000 taxable withdrawal would cost $16,000 in tax, against nothing for a qualifying one. How taxable withdrawals are handled is on withdrawing from an FHSA not for a home.
Related guides
Sources
The figures and rules on this page come from these sources, last checked against them between August 29, 2026 and September 29, 2026. How we check facts.
- Canada Revenue Agency: FHSA: Withdrawals and transfers out of your FHSAs
- Canada Revenue Agency: FHSA: Definitions for FHSAs
- Canada Revenue Agency: RRSP: How to participate in the Home Buyers' Plan
- Canada Revenue Agency: FHSA: Participating in your FHSAs