Yes, you can move money from your First Home Savings Account (FHSA) to your RRSP without paying tax, as long as the money goes directly from one financial institution to the other. If you withdraw the cash yourself and deposit it later, the withdrawal is taxable and the RRSP deposit counts as a new contribution. This guide walks through the rules, the paperwork, what happens to your contribution room and what to do with the empty FHSA afterward.
TL;DR
- A direct FHSA-to-RRSP transfer has no immediate tax consequences, provided you have no excess FHSA amount and you are the annuitant of the receiving RRSP.
- Ask your financial institution for Form RC721 (or its own equivalent) and let the two institutions move the money. Never withdraw it first.
- A direct transfer does not use your RRSP deduction room and does not reduce your unused FHSA participation room.
- Close or empty your FHSA before your maximum participation period ends, or the full value becomes taxable income.
Table of Contents
- Can you transfer an FHSA to an RRSP?
- Why people make this transfer
- Direct transfer vs. withdrawing the money yourself
- How to transfer step by step
- What happens to your contribution room
- When an excess FHSA amount causes tax
- Deadlines: when the FHSA must be emptied
- Practical example: the 15-year plan
- Alternatives to think about before you transfer
- Mistakes to avoid
- Our perspective
- Get a planner’s help with the move
- FAQ
- Sources
Can you transfer an FHSA to an RRSP?
Yes. The Canada Revenue Agency (CRA) allows you to transfer property from your FHSA to your RRSP or RRIF without immediate tax consequences. Two conditions apply:
- The transfer must be direct, meaning it goes between the financial institutions that hold the two plans.
- You must not have an excess FHSA amount when it happens.
You must also be the annuitant of the receiving RRSP. A transfer into a spousal RRSP where your partner is the annuitant does not fit this rule, so keep it in your own plan. If spousal plans are part of your strategy, our guide to spousal RRSP timing and the three-year attribution rule covers that separately.
The transfer also does not need to wait for a deadline. You can do it whenever you decide the FHSA has done its job, as long as you are still inside your participation period.
Why people make this transfer
The FHSA is built for a first home, but plans change. Maybe you decided to keep renting, a move abroad came up, or you bought a home using other funds and still have FHSA savings. Rather than let the account run out its clock, many people move the balance into an RRSP, where it keeps growing tax-sheltered for retirement.
The transfer also lets you keep the tax deduction you already claimed on your FHSA contributions. Money that went in with a deduction and moves into an RRSP stays sheltered, instead of being added to your income.
Common situations:
- You never bought a qualifying home and your FHSA is approaching the end of its life.
- You bought a home and withdrew only part of the balance, so the remainder needs a new home.
- You changed your mind about buying and want the money working toward retirement.
- You want to consolidate accounts and investments in one place.
Direct transfer vs. withdrawing the money yourself
This distinction is where most costly mistakes happen. The CRA defines a direct transfer as one completed between the financial institutions of the two plans, without you withdrawing the property yourself.
| Direct transfer | Withdraw, then contribute | |
|---|---|---|
| Who moves the money | Your two financial institutions | You |
| Tax at the time | None immediately | Withdrawal is reported as income |
| RRSP deduction room | Not used | Used by the new contribution |
| Risk | Low, if the form is complete | Possible excess RRSP contribution |
| Slips issued | No T4FHSA, no RRSP receipt | T4FHSA and an RRSP receipt |
If you withdraw first, the amount is a taxable withdrawal from the FHSA. A later RRSP contribution is treated as a fresh contribution that reduces your RRSP deduction room or can create an excess contribution. You could pay tax on money you then struggle to shelter again. When you do plan to take cash out of your FHSA for a home purchase instead, see our breakdown of FHSA withdrawal rules, qualifying versus taxable.
A quick example. Say your FHSA holds $20,000. With a direct transfer, $20,000 lands in your RRSP, your income for the year does not change and your RRSP room stays intact. If you withdraw it and then deposit $20,000 into your RRSP, you report $20,000 of income from the withdrawal and the deposit eats $20,000 of RRSP room. You would then claim a deduction for the contribution to offset the income, but only if you have the room and the timing works.
The CRA’s own guidance on transfers notes that even where a direct transfer to an RRSP does not affect your deduction limit, you may still need to include an amount in income and claim an offsetting deduction in some situations. That is one more reason to keep the movement direct and documented.
How to transfer step by step
- Open or confirm your RRSP. You must be the annuitant. If you do not have one, open it first. Choose the investments you want the money to be placed in.
- Check for an excess FHSA amount. Look at your CRA My Account for your FHSA participation room and contributions. An excess amount changes the tax result (see below).
- Get the form. Ask your financial institution for Form RC721, Transfer from your FHSA to your FHSA, RRSP or RRIF. The CRA says you fill out Parts 1, 2 and 3 and hand it to the receiving institution.
- Let the institutions do the work. The receiving institution sends the request and the money moves between them. You never touch the funds.
- Decide cash or in kind. Ask whether your investments can move as they are (an in-kind transfer) or must be sold first. Selling inside the FHSA does not create tax, but you may be out of the market for a few days.
- Keep the confirmation. Some institutions use their own paperwork instead of RC721, which is fine as long as they give you confirmation of the transfer details. File it with your tax records.
Processing times vary by institution, so ask yours how long it usually takes. If you are moving money close to the end of your participation period, start well before December.
What happens to your contribution room
A direct transfer is neutral for both accounts. The CRA states that direct transfers from an FHSA to an RRSP or RRIF do not reduce your unused FHSA participation room or your unused RRSP deduction room.
This is a real advantage. Your RRSP room for the year stays available for new contributions from your paycheque or savings. Think of the FHSA money as arriving “on top” of your regular RRSP savings, not replacing them. If you are planning your regular contributions as well, check the RRSP contribution deadline so you do not miss the window.
Two practical effects:
- No slips for the transfer. The CRA instructs that the sending institution should not issue a T4FHSA for a direct transfer, and the receiving institution should not issue a T4FHSA or an RRSP contribution receipt for that amount. Do not be alarmed when no receipt arrives, and do not try to claim a second deduction.
- No new deduction. Because the money was already deducted when you put it into the FHSA, it is not deductible again in the RRSP. The tax benefit simply travels with the money.
When an excess FHSA amount causes tax
An excess FHSA amount arises when you contribute more than your participation room allows. If you have one at the time of the transfer, part of the move can become taxable. According to the CRA, the portion that exceeds the fair market value of the property minus the excess amount is treated as both a taxable FHSA withdrawal and a new RRSP contribution.
In plain terms: fix over-contributions before you transfer. Withdraw the excess properly, check the CRA’s guidance on the tax that applies to it, and then transfer the rest. If your contribution history is messy (several accounts, mid-year changes, or contributions from different sources), a quick review with a planner is cheap insurance.
Deadlines: when the FHSA must be emptied
Your FHSA does not last forever. The CRA says your maximum participation period ends on December 31 of the year in which the earliest of these happens:
- the 15th anniversary of opening your first FHSA
- you turn 71
- the year following your first qualifying withdrawal
If property remains in the FHSA after that date, it stops being an FHSA and you must include the fair market value as of December 31 as income on that year’s return. The CRA recommends closing all your FHSAs before the period ends. If you hold property on or before the end of that period, you can generally transfer it directly to an RRSP or RRIF on a tax-deferred basis.
Note what the 15 years count from: the day you opened your first FHSA, not your first contribution. The CRA’s own example has a person opening an account in August 2025 and contributing for the first time in 2028, and the period still ends on December 31, 2040.
After a qualifying withdrawal, the clock is shorter. Your participation period ends at the end of the following year, so any leftover balance needs to go to an RRSP or RRIF by then.
Can you keep the empty FHSA open?
Once the property is moved you can close the account. Until the end of your participation period, an account that stays open can still hold new contributions, as long as you have room. After a first qualifying withdrawal, new contributions are no longer deductible. Ask your institution whether it charges fees on an open empty account and whether it will keep it open.
Practical example: the 15-year plan
Priya opens an FHSA at 28 and puts in savings for several years. At 41 she has not bought a home and does not plan to soon. Her FHSA has grown, she has no excess amount, and her RRSP is open at the same institution.
She asks for RC721, fills in Parts 1, 2 and 3, and the transfer is processed between the two accounts. She reports nothing for the transfer, her RRSP room is unchanged and she keeps contributing to the RRSP each year. The funds now sit in a plan that can last until she converts to a RRIF. Later, her withdrawals will follow the rules in our guide to RRIF withdrawals and age 71 tax timing.
This is an illustration, not a forecast of anyone’s results.
Alternatives to think about before you transfer
A transfer is not the only option for money in your FHSA, and the right one depends on your plans.
- Buy a home. A qualifying withdrawal is tax-free. If you also use the RRSP Home Buyers’ Plan, read through the RRSP Home Buyers’ Plan rules and reporting to see how withdrawals, repayments and slips interact so you do not create an avoidable tax bill.
- Wait. If you may still buy within the participation period, leave the money in. You can transfer later.
- Withdraw and pay tax. Sometimes you need the cash. The withdrawal is taxable income, and withholding tax may apply at your institution. Our article on RRSP withholding tax explains how withholding works on registered plans, which is useful context for any taxable withdrawal.
- Use other accounts. A TFSA is more flexible for money you might need soon. See TFSA withdrawal rules and the TFSA contribution limit before deciding where each dollar belongs.
Mistakes to avoid
- Taking the cash out first. This turns a tax-deferred move into a taxable one.
- Ignoring excess contributions. Fix them before the transfer.
- Missing the end of the participation period. The full balance becomes income.
- Transferring into someone else’s plan. You must be the annuitant.
- Expecting a receipt. A direct transfer produces none, so keep your own confirmation.
- Leaving it to the last week of December. Institutions need processing time.
Our perspective
We see the FHSA-to-RRSP move as a planning decision, not a form-filling task. The mechanics are simple, and the CRA rules are clear about keeping the transfer direct. The harder question is what the money is meant to do for you: a first home, retirement income, or a bridge between the two.
Most of the clients we meet in Canada, whether families or business owners, are juggling several goals at once: a mortgage, children’s education, protecting income if illness or injury strikes and building a retirement nest egg. The FHSA and RRSP are two tools among many. Looking at them in isolation is how people end up with tax surprises or idle money.
Our approach is to pair the account decision with a full picture: your RRSP room, your tax bracket, your insurance protection and your estate plan. A certified financial planner can check your contribution history, confirm no excess amount exists and time the transfer well before your deadline. Our digital onboarding keeps the process jargon-free, and our planners explain each step in plain language.
If you are unsure whether to transfer, wait or withdraw, ask before you move any money. A direct transfer is easy to do right and expensive to undo.
Frank
Get a planner’s help with the move
If you are weighing an FHSA transfer alongside retirement savings, mortgage protection or income protection, we can help you line up the pieces. Our team offers financial planning for families and business owners across Canada, including retirement, investment and estate planning, so your accounts and your insurance work together.
See everything we offer on our services page and reach out for a conversation about your situation.
FAQ
Can I transfer my FHSA to an RRSP at any time?
Yes, you can arrange a direct transfer whenever you hold property in the FHSA and you do not have an excess FHSA amount. You need an RRSP of which you are the annuitant. Many people do it once their plans change or as the end of the participation period approaches.
Does an FHSA transfer to an RRSP use my RRSP room?
Not when it is a direct transfer. The CRA says direct transfers from an FHSA to an RRSP or RRIF do not reduce your unused RRSP deduction room or your FHSA participation room. If you withdraw the money and contribute it yourself, it does use RRSP room.
What form do I need?
Form RC721 is the CRA form for transferring from an FHSA to another FHSA, RRSP or RRIF. You complete it and give it to your financial institution. Some institutions use their own paperwork instead, as long as they give you confirmation of the transfer.
What happens if I do not use my FHSA for a home?
You can transfer the property directly to an RRSP or RRIF before your maximum participation period ends, without immediate tax. If property is still in the account after that period, its fair market value on December 31 is added to your income for that year.
Will I get a tax slip for the transfer?
No. For a direct transfer, the CRA says neither institution should issue a T4FHSA, and the receiving institution should not issue an RRSP contribution receipt. Keep the transfer confirmation with your tax records.
Sources
- Withdrawals and transfers out of your FHSAs, Canada.ca
- Closing your FHSAs, Canada.ca
- Form RC721, Transfer from your FHSA to your FHSA, RRSP or RRIF
- Transferring, Canada.ca