To make a tax-free qualifying withdrawal from your First Home Savings Account (FHSA), the property you are buying must meet specific rules set by the CRA. Understanding what counts — and what does not — prevents a costly taxable withdrawal.
This page is the core purchase-eligibility layer of the FHSA branch, so it works best with the main FHSA guide, the broader FHSA withdrawal rules, and the implementation page FHSA and RRSP HBP at the same time. For spouse-related edge cases, compare it with can I open an FHSA if my partner owns a home.
What is a qualifying home?
A qualifying home for FHSA purposes must be:
| Requirement | Details |
|---|---|
| Located in Canada | The property must be in Canada. Foreign real estate does not qualify. |
| Intended as principal residence | You must intend to occupy it as your principal place of residence within one year. |
| Have a written agreement | You must have a written agreement to buy or build before making the withdrawal. |
Types of property that qualify
| Property Type | Qualifies? | Notes |
|---|---|---|
| Detached house | ✅ Yes | Most common qualifying purchase |
| Semi-detached / duplex | ✅ Yes | As long as one unit is your principal residence |
| Townhouse | ✅ Yes | Freehold or condo-style both qualify |
| Condominium unit | ✅ Yes | Including new construction pre-sale condos |
| Mobile or modular home | ✅ Yes | Must be on a permanent foundation |
| Co-operative housing share | ✅ Yes | If the share gives you the right to occupy as principal residence |
| Land + construction contract | ✅ Yes | Must have a written construction agreement |
| Cottage / vacation home | ❌ No | Not principal residence |
| Rental property | ❌ No | Not principal residence |
| Commercial property | ❌ No | Not residential |
| Foreign property | ❌ No | Must be in Canada |
The first-time home buyer definition
To make a qualifying withdrawal, you must also be a first-time home buyer. This condition is separate from the property type condition.
Under FHSA rules, you are a first-time home buyer if you have not owned a qualifying home in Canada that you lived in as your principal place of residence:
- At any time in the current calendar year before the FHSA was opened, and
- At any time in the preceding four calendar years
This is often called the five-year look-back rule.
First-time buyer qualification examples
| Scenario | First-Time Buyer? |
|---|---|
| Never owned a home in Canada | ✅ Yes |
| Owned a home in Canada but sold it 5+ years ago | ✅ Yes |
| Owned investment property but never lived in it | ✅ Yes |
| Moved to Canada but owned abroad (never owned in Canada) | ✅ Yes |
| Spouse owned a home 6 years ago (both moved out) | ✅ Yes |
| Owned a home in Canada 3 years ago | ❌ No |
| Spouse currently owns a home in Canada | ❌ No |
| Sold your home 2 years ago and rented since | ❌ No |
Key nuance: The look-back applies to homes in Canada only. If you owned property abroad but never owned a Canadian home (or not in the last five years), you typically qualify as a first-time buyer. This is significant for newcomers to Canada.
Must your spouse also qualify?
Yes. Both you and your spouse or common-law partner must individually meet the first-time buyer definition at the time of withdrawal. If your spouse owned a home in Canada within the past five years, neither of you can make a qualifying FHSA withdrawal for that purchase.
| Your Status | Spouse’s Status | Can Both Use FHSA? |
|---|---|---|
| First-time buyer | First-time buyer | ✅ Yes |
| First-time buyer | Owned home 3 years ago | ❌ No |
| First-time buyer | Owned investment property (never lived in) | ✅ Yes |
| Owned home 2 years ago | First-time buyer | ❌ No |
The written agreement requirement
You must have a written agreement to buy or build a qualifying home before you request an FHSA withdrawal. A verbal agreement or an accepted offer does not meet this requirement on its own — there must be a signed written contract.
| Purchase Type | What Counts as the Written Agreement |
|---|---|
| Resale home | Signed Agreement of Purchase and Sale (APS) |
| New construction / builder | Signed purchase agreement with the builder |
| Custom build on owned land | Signed construction contract with the builder |
| Pre-construction condo | Signed pre-sale agreement |
Timing: withdrawal relative to closing
| Stage | Can You Withdraw? |
|---|---|
| Before signing APS | ❌ No |
| After signing APS, before closing | ✅ Yes |
| Within 30 days after closing | ✅ Yes |
| More than 30 days after closing | ❌ No |
You have a 30-day window after the closing date to make the withdrawal retroactively, but this is the outside limit.
Occupancy requirement: the one-year rule
After a qualifying withdrawal, you must:
- Complete the purchase of the qualifying home
- Occupy it as your principal place of residence by October 1 of the year following the withdrawal
| Withdrawal Date | Occupancy Deadline |
|---|---|
| January 2026 | October 1, 2027 |
| June 2026 | October 1, 2027 |
| December 2026 | October 1, 2027 |
| March 2027 | October 1, 2028 |
Principal residence means the home you primarily live in. You do not need to own no other properties, but the qualifying home must be where you routinely reside.
Edge cases and common questions
Pre-construction condos
A pre-construction condominium purchase qualifies as long as you have a signed agreement with the developer and intend to occupy the unit as your principal residence within one year of the expected completion date. Delays in occupancy beyond the one-year window can jeopardize qualifying status — contact CRA if this happens.
Buying jointly with a non-qualifying partner
If you are buying with a spouse who does not meet the first-time buyer definition, neither of you can make a qualifying FHSA withdrawal for that purchase. However, if you are buying with a friend, sibling, or other person who is not your spouse, your qualifying status is assessed independently. You may be able to make a qualifying withdrawal even if your co-purchaser cannot.
Inheriting a home
If you inherit a home and live in it, you typically no longer qualify as a first-time buyer from that point forward (subject to the five-year look-back). An inherited home that you never live in does not generally disqualify you.
What if the deal falls through?
If a transaction collapses after a qualifying withdrawal has already been made, you should notify CRA. You may face a taxable situation depending on circumstances. In some cases, CRA allows re-contribution — keep all documentation from the failed transaction.
The qualifying withdrawal process (Form RC725)
Once you have confirmed eligibility, follow these steps:
| Step | Action |
|---|---|
| 1 | Confirm you meet the first-time buyer definition |
| 2 | Sign a written purchase or construction agreement |
| 3 | Complete Form RC725 — Request to Make a Qualifying Withdrawal from your FHSA |
| 4 | Submit Form RC725 to your FHSA issuer (financial institution) |
| 5 | Receive funds tax-free — no withholding applies to qualifying withdrawals |
| 6 | Close on the home and occupy as principal residence by the deadline |
Qualifying vs non-qualifying withdrawal: the tax difference
The difference in tax treatment makes it critical to meet all qualifying conditions before withdrawing.
| Withdrawal Type | Tax Withheld at Source | Reported on Tax Return | Net Tax |
|---|---|---|---|
| Qualifying home purchase | None | Not included in income | $0 |
| Non-qualifying (eg. early access, wrong property) | Yes (depends on amount) | Included as taxable income | Full marginal rate |
Example: $40,000 non-qualifying withdrawal at a 40% combined marginal tax rate = $16,000 in tax owing.