I'm buying a new build house and the expected possession date is early December. I have some questions around the strategy/timings below,
Scenario: Possession day is December 10, 2026
>CRA: Contributions made to an FHSA following a qualifying withdrawal being made (i.e., when buying a first home) would not be deductible from net income.
>CRA: First, a taxpayer must be a first-time home buyer at the time a withdrawal is made. Specifically, the taxpayer could not have owned a home in which they lived at any time during the part of the calendar year before the withdrawal is made or at any time in the preceding four calendar years. There is an exception to allow individuals to make qualifying withdrawals within 30 days of moving into their home.
Strategy:
- December 10, 2026 close on house without withdrawing from FHSA, so that future contributions are still deductible
- January 1, 2027 contribute $8,000 to FHSA
- January 1, 2027 immediately withdrawal the entire FHSA (ie. $40,000) as an eligible withdrawal
This triggers the exception window as within 30 days of December 10, 2026 would be Jan 8, 2027.
Questions:
- Would the exception window allow me to close with lets say $32,000 on December 10, 2026? Then quoteblock 1 is overided by the exception so I can pull the $8,000 out of Jan 1, 2027?
- Operationally, Canada's banking system is so slow, if I triggered a withdrawal with Form RC725, is the date of withdrawal used when funds actually come out or when the form is submitted?