Tax Planning Strategies

FHSA Successor Holder vs Beneficiary: Rules for Spouses

By October 5, 2026 No Comments
This article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.

Last Updated: October 2026

» Quick Answer: Can Your Spouse Take Over Your FHSA?

Yes. Your spouse or common-law partner becomes the new holder of your FHSA immediately after your death if two conditions are met: you designated them as successor holder, and they are a qualifying individual at the time of your death. Only a spouse or common-law partner can be a successor holder. A spouse named only as a beneficiary cannot take over the account, but can transfer the funds directly to their own FHSA, RRSP or RRIF without immediate tax until December 31 of the year after the year of death. Any other beneficiary, such as a child or parent, must report the amount received as income. If no one is named, the FHSA is paid to the estate and taxed as estate income.

When you open a First Home Savings Account (FHSA), the application asks who should receive it if you die. Most forms offer two choices that sound almost identical: successor holder or beneficiary.

That choice matters more than it looks. An FHSA successor holder can step into your place and keep the account tax-sheltered. A beneficiary generally receives a payout instead, and depending on who they are, that payout can be taxable income.

This guide is for couples saving for a first home, surviving spouses, and executors who have found an FHSA with no one named on it. The fix is usually a single free form, and a surviving spouse typically has more than a year to act. By the end, you can tell which box to choose and what to do if a holder has already died.

2Conditions for a spouse to take over the FHSA
Dec 31Of the year after death: deadline to act
60 daysTo send the CRA a copy of Form RC724
1%Monthly tax on an excess FHSA amount

» Successor Holder and Beneficiary: What Each Term Means

A successor holder takes over the FHSA itself; a beneficiary receives what is inside it. Under the Income Tax Act, only a spouse or common-law partner can be named successor holder, and they keep the account only if they qualify to hold an FHSA when the holder dies. Anyone, including a charity, can be a beneficiary.

The Canada Revenue Agency (CRA) uses two more terms. A survivor is your spouse or common-law partner immediately before your death. A qualifying individual is generally a resident of Canada, at least 18, who has not lived in a home that they or their spouse owned in the current year or the preceding four calendar years.

Tax-Free Savings Accounts use the same successor holder idea, so if you have reviewed your TFSA contribution limit for 2026, check that designation too.

» Quick Start: Pick Your Path

Find the line that matches your situation and start there.

  • →Path A: you hold an FHSA and your spouse or common-law partner has not owned a home recently. Name them as successor holder. Couples still planning a purchase can also review Ontario first-time home buyer rebates.
  • →Path B: you hold an FHSA and your spouse already owns a home or lives outside Canada. Still name them. They can typically move it to their RRSP or RRIF without immediate tax.
  • →Path C: you hold an FHSA and have no spouse or common-law partner. Name a beneficiary to keep the account out of your estate, and expect it to be taxable to them.
  • →Path D: your spouse has died and held an FHSA. Go to the step-by-step section.
  • →Path E: you are the executor and no one was named. Go to the estate section.

In Ontario, ask your financial institution to confirm how it treats a designation made on the FHSA form, and consider repeating it in your will with an estates lawyer. Designation rules differ by province, and Quebec residents should confirm the correct method with a notary or their institution.

» Successor Holder vs Beneficiary vs No Designation: Side-by-Side

The tax result depends on who was named and whether a surviving spouse qualifies to hold an FHSA.

DesignationTakes over the FHSA?Tax-deferred transfer?What is taxableDeadlineForms and slips
Spouse or common-law partner as successor holder, qualifying individualYes, immediatelyYes. May also move it to an RRSP or RRIFNothing while funds stay in the FHSANone to keep the accountSchedule 15. T4FHSA box 22 if withdrawn
Spouse or common-law partner as successor holder, not a qualifying individualNoYes, to an RRSP, RRIF or an FHSA they already holdOnly amounts taken as cashEnd of exempt periodForm RC722. T4FHSA box 24
Spouse or common-law partner as beneficiary onlyNoYes, to their own FHSA, RRSP or RRIFCash amounts, plus anything left at the deadlineEnd of exempt periodForm RC722. T4FHSA box 24 or 26
Other beneficiary (child, parent, sibling)NoNoFull amount receivedEnd of exempt periodT4FHSA box 24 or 26
No designation (estate)NoOnly through a joint designation with a surviving spouseEstate income, unless jointly designated to the spouseEnd of exempt period. RC724 copy to CRA within 60 daysForm RC724. Ontario Estate Administration Tax may apply

Only the first row keeps the account alive. Rows two and three keep the tax deferral, while rows four and five generally do not.

ClearWealth Accounting Advisors
FHSA After Death: Five Outcomes Compared
What happens to a First Home Savings Account depends on who was named and whether a surviving spouse or common-law partner qualifies to hold one.
1 of 5
Outcomes that keep the FHSA open
3 of 5
Outcomes where a spouse can transfer directly with tax deferred
December 31
Of the year after death: the deadline to act
Source: Canada Revenue Agency, Death and FHSAs (canada.ca), page modified February 2, 2026. ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only

» The Exempt Period: The Deadline That Controls Every Option

The exempt period runs from the date of death to December 31 of the first calendar year that begins after the death. During this window the account keeps its FHSA status, and a surviving spouse can generally make a direct, tax-deferred transfer. Once it ends, the account stops being an FHSA.

The CRA gives this example: if a holder dies on January 1, 2025, the exempt period could continue until December 31, 2026.

Any value still in the account at the end of the exempt period is generally included in each beneficiary's income for that year, even if nothing has been paid out. Tax-deferred transfers are not allowed after that date. There is usually time to get advice first, but the deadline is firm.

ClearWealth Accounting Advisors
The FHSA Exempt Period: Key Dates After a Death
Worked example for a holder who dies on June 10, 2026. The exempt period ends on December 31 of the first calendar year that begins after the death.
June 10, 2026
Date of death in this example
December 31, 2027
Exempt period ends
569 days
To complete a direct transfer in this example
60 days
To send the CRA a copy of Form RC724 after a joint designation
Source: Canada Revenue Agency, Death and FHSAs (canada.ca), page modified February 2, 2026. Example dates are illustrative. ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only

» What a Surviving Spouse Should Do, Step by Step

  1. 1
    Find the designation.Check the FHSA contract and the will, since either can name a successor holder or beneficiary.
  2. 2
    Confirm whether you qualify.Ask whether you were a qualifying individual on the date of death.
  3. 3
    Choose what to do with the account.A named successor holder who qualifies can keep the FHSA. Otherwise you can generally transfer it to your own FHSA, RRSP or RRIF, or take a taxable withdrawal. If you are weighing the RRSP route, review RRSP Home Buyers' Plan repayment timing first.
  4. 4
    Ask for a direct transfer.The institution can use Form RC722 or its own paperwork. A cheque made out to you is a taxable distribution, not a transfer.
  5. 5
    Check for an excess FHSA amount.This means contributions above the deceased's available room. It is taxed at 1% per month up to and including the month of death, and the legal representative reports it on Form RC728.
  6. 6
    Report it on your return.File Schedule 15 for the year you become the holder, even with no contributions, and report any T4FHSA amounts.

» When No One Is Named: The Estate Route in Ontario

With no successor holder or beneficiary, the FHSA is paid to the estate and treated as income of the estate. A surviving spouse who is entitled to part of the estate may still preserve the tax deferral by filing a joint designation with the legal representative on Form RC724.

The joint designation treats the amount as if it moved straight from the FHSA to the spouse's own FHSA, RRSP or RRIF. The property must reach the estate before the exempt period ends, and a copy of Form RC724 goes to the CRA within 60 days. Estates that earn income may also have trust filing duties, so check the T3 trust return deadline.

Ontario adds a second cost. An FHSA that falls into the estate may add to Estate Administration Tax, often called probate. The Ontario Ministry of Finance calculates it at $15 for every $1,000, or part thereof, of estate value over $50,000, where an estate certificate is applied for.

ClearWealth Accounting Advisors
Amount Taxable in the Year of Receipt on a $40,000 FHSA, by Designation
Illustration only. Shows income included in the year of receipt, not tax owing, and assumes the deceased had no excess FHSA amount.
$0
Included when the spouse keeps the FHSA or transfers it directly
$40,000
Included when the same balance is paid out as cash or to the estate
Source: Canada Revenue Agency, Death and FHSAs (canada.ca), page modified February 2, 2026. Illustrative values prepared by ClearWealth. ClearWealth Accounting Advisors · clearwealth.tax · For informational purposes only

» Common Mistakes to Avoid

  • →Ticking beneficiary when you meant successor holder. Your spouse then cannot keep the account.
  • →Assuming a successor holder designation works for a spouse who already owns a home. They must still move the money out before the exempt period ends.
  • →Leaving the designation blank. The FHSA becomes estate income and may add to Ontario probate.
  • →Missing the end of the exempt period. The remaining value is generally taxed and the transfer option is gone.
  • →Accepting a cheque instead of a direct transfer. The amount is taxable in the year it is received.
  • →Forgetting to update the designation after a marriage, separation or new partner. Only the spouse or common-law partner at the time of death can be successor holder.
  • →Skipping Schedule 15 in the year you take over, or ignoring an excess FHSA amount, which is taxed at 1% per month.

» Frequently Asked Questions

Q

Can my spouse become the new holder of my FHSA after I die?

Yes. Your spouse or common-law partner becomes the new holder immediately after your death if you designated them as successor holder and they are a qualifying individual at that time. If either condition is missing, they cannot keep the account.
Q

What is the difference between a successor holder and a beneficiary on an FHSA?

A successor holder takes over the FHSA itself, so the account stays open and tax-sheltered. A beneficiary receives the money inside it, and the account must be emptied by the end of the exempt period. Only a spouse or common-law partner can be a successor holder.
Q

Does my spouse have to be a first-time home buyer to take over my FHSA?

Yes. To keep the account, your spouse must be a qualifying individual when you die, which includes being a first-time home buyer. A spouse who does not qualify can generally transfer the funds directly to their RRSP, RRIF or existing FHSA, or take a taxable distribution.
Q

What happens to my FHSA if I die without naming anyone?

The FHSA is paid to your estate and treated as income of the estate. A surviving spouse who is a beneficiary of the estate can file Form RC724 jointly with the legal representative. In Ontario, the balance may add to Estate Administration Tax.
Q

Can my child or parent inherit my FHSA tax-free?

No. A beneficiary other than a spouse or common-law partner must include the amount they receive in their income for the year they receive it. They have no tax-deferred transfer option, and the payment is reported on a T4FHSA slip.
Q

How long does my spouse have to move the money out of my FHSA after I die?

Your spouse has until the end of the exempt period, which is December 31 of the first calendar year that begins after your death. For a death on June 10, 2026, the deadline is December 31, 2027. After that, a tax-deferred transfer is no longer available.
Q

Will taking over my spouse's FHSA use up my own FHSA room?

Generally, no. The CRA states that a direct transfer after death does not affect unused FHSA participation room or unused RRSP deduction room for the survivor. One exception: an excess FHSA amount left by the deceased may count as a contribution by the successor holder.
Q

Can my common-law partner be my FHSA successor holder?

Yes. The CRA treats a common-law partner the same as a married spouse for this purpose. They must be your common-law partner immediately before your death, be designated as successor holder, and be a qualifying individual to keep the account.
Q

Is tax withheld when an FHSA is paid out to a beneficiary?

Yes. A taxable distribution from an FHSA is generally subject to income tax withholding by the financial institution. The amount withheld appears in box 30 of the T4FHSA slip, and the recipient claims it as a credit on their return for that year.

For related reading on registered plans and home buying, see more ClearWealth insights.

» Get Your FHSA Designation Right Before It Matters

The FHSA designation is free to make, takes minutes, and decides whether your savings pass to your spouse intact or arrive as taxable income. Check your FHSA form this week. If a holder has already died, there is usually time to choose the right option before the exempt period ends.

Talk to ClearWealth About Your FHSA

ClearWealth Accounting Advisors helps individuals, surviving spouses and executors in Toronto and across Ontario with final returns, estate filings and CRA forms such as RC722 and RC724. To talk through your situation, book a consultation with ClearWealth or explore our tax and advisory services.

Book a Consultation
This article is for informational purposes only and does not constitute tax or financial advice. Consult a qualified accounting professional before making any tax or financial decisions.

Sources and References

  1. Canada Revenue Agency. Death and FHSAs (page modified February 2, 2026). https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/death-and-fhsas.html
  2. Canada Revenue Agency. Opening your FHSAs (qualifying individual and first-time home buyer conditions). https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account/opening-your-fhsas.html
  3. Canada Revenue Agency. First Home Savings Account (FHSA). https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html
  4. Canada Revenue Agency. Form RC722, Transfer from an FHSA to an FHSA, RRSP or RRIF After the Death of the Holder. https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc722.html
  5. Canada Revenue Agency. Form RC724, Joint Designation for a Deemed Transfer or Distribution from an FHSA after the Death of the Holder. https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc724.html
  6. Canada Revenue Agency. Form RC728, First Home Savings Account (FHSA) Return. https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/rc728.html
  7. Canada Revenue Agency. T4FHSA slip, First Home Savings Account Statement. https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t4fhsa.html
  8. Canada Revenue Agency. Schedule 15, FHSA Contributions, Transfers and Activities. https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/5000-s15.html
  9. Government of Ontario, Ministry of Finance. Estate Administration Tax. https://www.ontario.ca/page/estate-administration-tax
  10. Income Tax Act (Canada), section 146.6.