Both can be used together — but they work very differently.
RECOMMENDED FOR MOST
First Home Savings Account (FHSA)
Launched April 2023. Contribute up to $8,000/year (lifetime max $40,000). Contributions are tax-deductible and withdrawals for a qualifying home purchase are completely tax-free.
- No repayment required (unlike HBP)
- Tax deduction on contributions
- Tax-free growth inside the account
- Unused room carries forward 1 year
- If unused after 15 years, transfers to RRSP
Home Buyers' Plan (HBP)
Withdraw up to $60,000 from your RRSP tax-free for a first home purchase (increased from $35,000 in 2024). Each partner can withdraw $60,000 — $120,000 for couples.
- Must be repaid over 15 years
- Repayment starts 2 years after withdrawal
- Requires existing RRSP savings
- No contribution deduction at withdrawal
- Great supplement to FHSA if RRSP is built up
Common questions
Can I use both the FHSA and the HBP for the same home purchase?
Yes — and this is often the optimal strategy. Maximize your FHSA contributions for as many years as possible, then supplement with an HBP withdrawal from your RRSP at purchase time. The two programs can be combined for a single qualifying home purchase.
What happens to my FHSA if I don't buy a home?
After 15 years from opening (or at age 71), unused FHSA funds transfer to your RRSP or RRIF without tax consequences. You don't lose the money — you just can't withdraw it tax-free for a home purchase anymore.
When should I open an FHSA?
As soon as possible — even if you're not planning to buy for several years. Contribution room accumulates from the date you open the account, not from birth. Opening an FHSA today and contributing $8,000 immediately gives you that deduction this tax year.
More questions
Does the FHSA affect my mortgage qualification?
No — FHSA funds are considered your own savings for down payment purposes and don't affect your mortgage qualification ratios differently from any other savings.
What qualifies as a "first home" for these programs?
You must not have owned a home that you lived in at any time during the current year or the preceding four calendar years. If you previously owned a home but haven't for 4+ years, you may qualify again. Both programs use the same definition.