FHSA and the RRSP Home Buyers’ Plan: the first-time-buyer accounts
Two registered accounts help first-time buyers build — and borrow for — a down payment. The good news: you can use both for the same purchase.
Saving a down payment is the hardest part of a first purchase, and Canada offers two registered accounts to help. They work differently — one is a dedicated savings account, the other lets you borrow from your own retirement savings — and you can combine them for the same home.
The First Home Savings Account (FHSA)
The FHSA is purpose-built for first-time buyers. It blends the best of an RRSP and a TFSA: contributions are tax-deductible, and qualifying withdrawals to buy a first home are tax-free.
Key facts
- $8,000 of contribution room per year, up to a $40,000 lifetime limit.
- Unused room carries forward, but only up to $8,000 can be carried into the next year (so the most you can contribute in one year is $16,000).
- Open to Canadian residents 18+ who are first-time buyers (you did not live in a home you owned in the year you open it or the prior four years).
The RRSP Home Buyers’ Plan (HBP)
The HBP lets you take a tax-free loan from your own RRSP to put toward a first home, then repay it over time.
Key facts
- Withdraw up to $60,000 each (raised from $35,000 for withdrawals after April 16, 2024) — a couple who each qualify can take up to $120,000.
- The funds must generally have been in the RRSP for at least 90 days.
- Repay over 15 years (about 1/15 per year); missed amounts are added to your taxable income.
- A temporary relief: for first withdrawals made 2022–2025, the start of repayment is deferred by an extra 3 years.
You can use both
The FHSA and the HBP can be combined for the same purchase — a meaningful boost to a down payment. Many first-time buyers use the FHSA for tax-deductible saving and the HBP to tap existing RRSP funds.
Confirm the current rules
These are federal accounts with detailed eligibility, contribution and repayment rules that change over time. Check the current limits with the CRA and a licensed financial advisor or accountant before acting.
Sources
GeoHouse is a technology company — not a licensed real estate brokerage, REALTOR®, lawyer, or financial advisor. This article is general education about how the process works in British Columbia, not advice for your specific transaction. Rules and figures change; confirm current details through the official sources linked above and consult a licensed REALTOR®, mortgage broker, lawyer, or notary before making decisions.