Plans change. If you never make a qualifying withdrawal, your FHSA money isn’t lost: it can move to an RRSP or RRIF without tax and without using RRSP room, as long as that happens before the account’s deadline. This page covers the deadline, your options, what happens to your deductions and room, and what happens if the holder dies. For how the account works overall, see the FHSA guide and the FHSA guides directory.
The deadline
Your maximum participation period starts when you open your first FHSA and ends on December 31 of the year in which the earliest of these happens:
- the 15th anniversary of opening your first FHSA,
- the year you turn 71,
- and the year after the year of your first qualifying withdrawal.
| First FHSA opened in | 15th anniversary falls in |
|---|---|
| 2025 | 2040 |
| 2026 | 2041 |
If you turn 71 before the anniversary, the age date comes first. Worked examples by age are on when to open an FHSA.
Until the deadline you can keep the account open, keep contributing within your room, and still make a qualifying withdrawal if you buy. CRA does not let you open a new FHSA after your maximum participation period ends.
Your options if you won’t be buying
Transfer to an RRSP or RRIF
| Feature | Details |
|---|---|
| Tax on the transfer | None |
| RRSP room needed | None: a direct transfer does not affect your unused RRSP deduction room |
| FHSA room | Not affected |
| Growth | Moves across with the contributions |
| Tax later | When the money is eventually withdrawn from the RRSP or RRIF |
CRA’s conditions for the transfer:
- It is a direct transfer between the institutions, made with Form RC721 or the institution's own document.
- Taking the money out and contributing it yourself is a taxable FHSA withdrawal and a new RRSP contribution that uses RRSP room.
- The RRSP or RRIF is one under which you are the annuitant.
- If you have an excess FHSA amount, only the value of your FHSAs minus the excess moves tax-free; the rest is a taxable withdrawal and a new RRSP contribution.
- A direct transfer doesn't affect your unused RRSP deduction room or your FHSA participation room.
- It is made on or before the end of your maximum participation period.
- The money then follows the usual RRSP and RRIF rules: amounts withdrawn from them later are included in your income.
In effect, the FHSA room you used becomes extra RRSP savings on top of your regular RRSP room, and you keep the deductions you claimed when you contributed.
Withdraw the money as taxable income
It is included in your income for the year you receive it. Tax is withheld at source and claimed as a credit against the tax you owe for that year. On a $40,000 withdrawal, the tax depends on your marginal rate:
| Marginal rate | Tax on $40,000 |
|---|---|
| 25% | $10,000 |
| 33% | $13,200 |
| 43% | $17,200 |
A large withdrawal can also push part of the amount into a higher bracket. The withholding rates, the reporting, and the re-participation room a taxable withdrawal creates while the account is still open are on withdrawing from an FHSA not for a home.
Leave it past the deadline
Anything still in the FHSA after the maximum participation period ends is treated as income: its fair market value is included in your income for that year. There is no grace period after December 31. The account then loses its FHSA status, so any income it earns afterwards is taxed under the normal rules each year.
| Option | Tax now | Tax later | RRSP room used |
|---|---|---|---|
| Direct transfer to an RRSP | None | On RRSP withdrawal | None |
| Direct transfer to a RRIF | None | On RRIF withdrawals, including the required minimums | None |
| Cash withdrawal | Full amount is income | None | None |
| Left past the deadline | Fair market value is income | Income earned afterwards, under the normal rules | None |
What happens to your deductions and room
- Deductions you claimed stay claimed. Not buying doesn’t reverse them.
- Deductions you carried forward but haven’t used yet can still be claimed in a later year, even after the account closes; see deduction timing.
- Unused FHSA room, including any carry-forward, simply ends when the account’s participation period ends; it can’t be moved to an RRSP. The carry-forward rules explain how that room builds up.
If the holder dies
What happens depends on who is named in the FHSA contract or the will, and on provincial or territorial succession law:
| Who is named | What happens |
|---|---|
| Spouse or common-law partner as successor holder, who is a qualifying individual | Becomes the new holder immediately after the death |
| Spouse or partner as successor holder who is not a qualifying individual | Must transfer everything directly to their own FHSA, RRSP or RRIF (no immediate tax) or take it as a taxable distribution, by the end of the exempt period |
| Spouse or partner as beneficiary | The same three choices, by the end of the exempt period; direct transfers don’t affect their RRSP or FHSA room |
| Any other beneficiary (for example, a child) | Amounts received are income to them, with tax withheld; no tax-deferred transfer is available |
| No one named | Paid to the estate and taxed as its income; a surviving spouse or common-law partner with a beneficial interest in the estate can jointly designate amounts paid out before the end of the exempt period as coming from the FHSA (a transfer to their own FHSA, RRSP or RRIF, or a distribution taxed to them) on Form RC724, with a copy sent to CRA within 60 days of the payment or transfer |
CRA’s page on death and FHSAs sets out the exempt period and the reporting for each case.
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: Closing your FHSA
- Canada Revenue Agency: FHSA: Participating in your FHSAs
- Canada Revenue Agency: FHSA: Death and FHSAs
- Canada Revenue Agency: FHSA: Opening your FHSAs
- Canada Revenue Agency: FHSA: Withdrawals and transfers out of your FHSAs
- Canada Revenue Agency: FHSA: Non-residents and FHSAs