First Home Savings Accounts and the Role of your Spouse or Common-Law Partner

As the availability of the new Tax-Free First Home Savings Account (FHSA) increases, Canadians can dive deeper into its features to understand how to use it to their benefit. Benefits of the account double when each member of a couple is eligible to open an account. However, where an individual has a spouse or common-law partner (CLP),¹ the couple should understand specific FHSA rules aimed at spousal relationships to ensure eligibility and maximum benefits from the account. Included in the rules are answers to the following questions:

• How is my status as a “first-time home buyer” impacted by having a spouse or CLP?
• Can my spouse contribute to my FHSA and claim the related tax deduction?
• Can I transfer funds from my spousal RRSP to my FHSA?
• What are the options for naming my spouse or CLP beneficiary of my FHSA?

Let’s discuss each of these questions.

1. How is my status as a first-time home buyer impacted by having a spouse or CLP?

To open an FHSA, an individual must be a first-time home buyer, defined as an individual who did not, at any time in the current calendar year before the account is opened or at any time in the preceding four calendar years, live in a home as their principal place of residence that either:

1. the individual owned solely or jointly; or,
2. the individual’s spouse or common-law partner owned solely or jointly.

In other words, if an individual lived in a home that they or a spouse or common-law partner owned in the year the FHSA is to be opened, or in the preceding four-year period, the individual would not be eligible to open an FHSA. Consider the following example.

Carlos is a Canadian resident who is 34 years old. Carlos would like to open an FHSA in June 2023. He currently lives with his common-law partner in a home that his common-law partner owns. Carlos is not considered to be a first-time home buyer because his common- law partner owns his current principal residence. As a result, Carlos is not a qualifying individual and will not be permitted to open an FHSA.²

It is important to note that first-time home buyer status applies not only at the time an FHSA is opened. It also applies when an FHSA holder attempts to make a tax-free withdrawal to purchase a first home. However, the definition of a first- time home buyer for withdrawal purposes differs slightly from the one that applies at account opening. Specifically, there is no reference to a spouse or CLP in the definition of a first-time home buyer for purposes of a tax-free withdrawal. The result? Once an FHSA is opened, an FHSA holder can make a qualifying, tax-free withdrawal to purchase a first home even if they currently reside in a home their spouse or CLP owns.

Having met the eligibility criteria, Joanne, a long-time renter, opened an FHSA in 2023. In 2025, she moves into a home owned by her boyfriend, Jack, and began a common-law relationship. In 2030, the couple finds a new home they decide to purchase together. Joanne could make a tax-free, qualifying withdrawal from her FHSA to purchase the new home even though she lives in a house owned by Jack in the current and preceding four-year period.

2. Can my spouse contribute to my FHSA and claim the related tax deduction?

Only the holder of an FHSA can contribute to their own account³ – a spouse or CLP cannot. Similarly, only the holder of an FHSA can claim the related tax deductions for contributions to the account. That said, the rules do not prevent a spouse from gifting assets to a partner for the partner to contribute to his/her own FHSA. Where such a strategy is employed, the normal attribution rules that apply to gifts between spouses (i.e., taxation of resulting income to the gifting spouse) would not apply to FHSA income.⁴

Earlier this year, Kelly contributed the maximum amount allowed to her FHSA. Her husband, Kevin, still has $6,000 of contribution room available. To take advantage of Kevin’s room, Kelly gifts $6,000 to Kevin, which he promptly contributes to his FHSA. Kevin would claim the related tax deduction, and a withdrawal of FHSA income in the future would not be subject to attribution.

3. Can I transfer funds from my spousal RRSP to my FHSA?

FSHA rules allow transfers from an RRSP to an FHSA, provided the FHSA holder has not exceeded FHSA contribution limits. How do these rules apply to spousal RRSPs? To recap, where the annuitant of a spousal RRSP makes a withdrawal from the spousal plan, an amount equal to contributions made by a spouse or CLP to any of the annuitant’s spousal RRSPs in the year of withdrawal or prior two-year period is taxed to the contributing spouse and not the annuitant. This is known as the spousal RRSP attribution period. Keeping this in mind, if the annuitant-spouse wants to transfer funds from their spousal RRSP to their FHSA, but contributions from a contributing spouse were made within the spousal attribution period, would the transfer be allowed? And if so, how would withdrawals from the FHSA be treated if the spousal attribution period had not yet expired?

Annuitants of spousal RRSPs are permitted to transfer property from their spousal RRSP to an FHSA of which they are the holder provided the annuitant’s spouse, or CLP, did not contribute to the spousal RRSP in the year of transfer or the previous two calendar years (i.e., the attribution period). If no contributions were made to the spousal RRSP in the attribution period, the normal RRSP to FHSA transfer rules apply.

Saul contributed $5,000 to Carla’s spousal RRSP in April 2023. In June 2024, Carla decides to open an FHSA. She wants to maximize her FHSA on that same day. Carla’s FHSA contribution room for 2024 was $8,000 because this was the first year she opened an FHSA. Carla would like to contribute $3,000 and directly transfer $5,000 from her spousal RRSP to her FHSA. Carla could contribute $3,000 to her FHSA, but to avoid unintended tax consequences, she must wait until at least January 1, 2026, to make a transfer from her spousal RRSP.⁵

4. What are the options for naming my spouse or CLP beneficiary of my FHSA?

Like TFSAs, FHSA holders can name their spouse or CLP “successor holder” on the FHSA contract⁶ or by way of a will, in which case the FHSA would maintain its tax-exempt status. If named successor holder, the surviving spouse would become the new holder of the FHSA upon the original holder’s death, provided the surviving spouse meets the eligibility criteria to open an FHSA (i.e., is at least age 18, a Canadian resident and a first-time home buyer). Inheriting an FHSA in this way would not impact the surviving spouse’s FHSA contribution limits.

When Tony opened his FHSA on May 1, 2023, he designated his spouse, Monica, as the successor holder. Tony died on October 13, 2023. Because Monica met the eligibility criteria to open an FHSA when Tony died, she could keep Tony’s FHSA and become the new account holder. Alternatively, Monica could have transferred the FHSA proceeds to her RRSP or RRIF or received the proceeds as a taxable payment.

If the surviving spouse is not eligible to open an FHSA at the time of their spouse’s death, amounts in the FHSA could instead be transferred to an RRSP, RRIF or pre-existing FHSA⁷ of the surviving spouse. The surviving spouse could also withdraw amounts from the FHSA on a taxable basis. Direct transfers to RRSPs, RRIFs and FHSAs occur on a tax-deferred basis. To avoid additional implications, the withdrawal or transfer should occur before the end of the year following the year of the FHSA holder’s death.

Brad is the holder of an FHSA who died in August 2023. Before his death, Brad designated his spouse, Kyle, as the successor holder of his FHSA. Brad did not have an excess FHSA amount on the date of his death. Kyle has been a non-resident of Canada since January 2023. Therefore, he is not considered a qualifying individual and cannot become the holder of the FHSA. Kyle must transfer or withdraw all the property of the FHSA by the end of the day on December 31, 2024.

Alternatively, the FHSA holder can name any person (including a spouse or CLP) or organization (e.g., registered charity) “beneficiary” of the FHSA on the account contract or by way of will. If the beneficiary is the holder’s spouse or CLP, the spouse or CLP can transfer the proceeds to his or her own FHSA, RRSP or RRIF without tax implications before the end of the year following the year of the holder’s death. Alternatively, the spouse/CLP can request a withdrawal, which would be taxable to him/her.

Rhonda, age 35, was named beneficiary of her spouse, Fred’s, FHSA. Fred passes away in May of 2025. As Fred didn’t name a successor holder on the account, the proceeds could be paid (or, paid or transferred in the case of a spouse or CLP) to a designated beneficiary, and the account closed. As the beneficiary, to avoid immediate tax implications, Rhonda requests a direct transfer of Fred’s FHSA proceeds to her FHSA, which was completed before December 31, 2026, on a tax-deferred basis. Rhonda did not require FHSA contribution room to complete the transfer.

If the beneficiary of the FHSA is not the deceased holder’s spouse or CLP, the funds would be paid to the beneficiary (or the deceased’s estate where no beneficiary is named) following the death of the FHSA holder. Amounts paid to the beneficiary (or deceased’s estate) would be included in the beneficiary’s income (or estate) for tax purposes.

Having a spouse or CLP is not a prerequisite for having an FHSA. For those who do, however, understanding the spousal rules can go a long way toward maximizing the benefits of the account.

To open this article in a shareable format, click here.

¹ A common-law partner (CLP) is defined as a person with whom the individual has been living in a conjugal relationship for 12 or more months (or are parents to a common child) without a breakdown of the relationship for 90 days or more.
² Source: Canada Revenue Agency (CRA)
³ Federal Income Tax Act (ITA), section 146.6(2)(c)
⁴ Federal ITA, section 74.5(12)(d)
⁵ Source: Canada Revenue Agency (CRA)
⁶ Except for insurance contracts, contract level designations for registered accounts are not normally permitted in Quebec. Quebec residents would normally make their designations in their wills.
⁷ At the time of publishing, the ability of a surviving spouse (who was named successor holder but not eligible to open an FHSA) to transfer the deceased’s FHSA to his/her own FHSA was a proposal that had not yet passed; the ability to transfer to an RRSP or RRIF had already passed.