Using both the First Home Savings Account (FHSA) and the RRSP Home Buyers’ Plan (HBP) together is one of the most powerful strategies available to Canadian first-time home buyers. The two programs are completely compatible — you can use both for the same home purchase, and the combined maximum has grown significantly since the FHSA launched.
FHSA vs HBP: side-by-side comparison
| Feature | FHSA | RRSP Home Buyers’ Plan (HBP) |
|---|---|---|
| Maximum withdrawal | $40,000 (lifetime) | $35,000 per person |
| Tax on withdrawal | None (qualifying) | None at time of withdrawal |
| Repayment required? | ❌ No | ✅ Yes — over 15 years |
| Penalty for not repaying | N/A | Unpaid amount added to taxable income each year |
| Income tax deduction on contributions | ✅ Yes (like RRSP) | Separate — on RRSP contributions |
| Tax-free growth | ✅ Yes | Tax-deferred (not tax-free) |
| RRSP room consumed | ❌ No | ❌ No (but repayment uses new room) |
| Account must be open X years | FHSA: open and contributed | RRSP: 90-day seasoning rule applies |
Maximum you can access: individual and couple
| Scenario | FHSA | HBP | Total |
|---|---|---|---|
| Single buyer, FHSA + HBP | $40,000 | $35,000 | $75,000 |
| Couple, both using FHSA + HBP | $80,000 | $70,000 | $150,000 |
| Single buyer, FHSA only | $40,000 | — | $40,000 |
| Single buyer, HBP only | — | $35,000 | $35,000 |
Note: The $40,000 FHSA maximum is the lifetime contribution limit. Your actual withdrawal cannot exceed what you have contributed (plus investment growth inside the account).
How to use both for the same purchase
You can make FHSA and HBP withdrawals on the same home purchase. They are processed independently through separate forms and separate accounts.
| Step | FHSA | HBP |
|---|---|---|
| Written purchase agreement | Required first | Required first |
| Form to complete | RC725 | T1036 |
| Submitted to | FHSA issuer | RRSP issuer |
| Withholding tax | None | None |
| Reported on tax return | Not as income | Not as income |
| Deadline | Within 30 days of closing | Before closing (typically) |
Process timeline for using both
- Sign the Agreement of Purchase and Sale.
- Complete Form RC725 — submit to your FHSA provider to initiate qualifying FHSA withdrawal.
- Complete Form T1036 — submit to your RRSP provider to initiate HBP withdrawal.
- Both amounts are deposited to your bank account tax-free.
- Close on the home and occupy it as your principal residence.
- File your tax return — FHSA qualifying withdrawal is not reported as income; HBP withdrawal shows on your schedule but is not income.
- Begin HBP repayments two years after the year of withdrawal (or sooner optionally).
The repayment difference: why FHSA wins
The key strategic difference between FHSA and HBP is repayment. FHSA has none. HBP requires you to repay your RRSP over 15 annual instalments.
HBP repayment example — $35,000 HBP withdrawal:
| Year | Minimum Annual Repayment | Remaining Balance |
|---|---|---|
| Year 1 | $2,333 | $32,667 |
| Year 2 | $2,333 | $30,333 |
| Year 3 | $2,333 | $28,000 |
| … | $2,333 | … |
| Year 15 | $2,333 | $0 |
If you miss a repayment, that year’s required repayment is added to your taxable income. For example, missing $2,333 at a 33% marginal rate costs approximately $770 in tax.
FHSA has no such obligation — once you make a qualifying withdrawal, the money is yours with no further tax consequences.
Which to use first: FHSA or HBP?
Use FHSA funds first, then supplement with HBP if needed.
| Priority | Reason |
|---|---|
| FHSA first | No repayment required, truly tax-free benefit |
| HBP second | Repayment obligation over 15 years — RRSP funds taken out must go back in |
Exception: If your FHSA balance is small (you opened recently), using HBP for the bulk of the down payment and supplementing with FHSA may be the practical reality. Both are used for the same home regardless of which covers more.
Tax deduction strategy: FHSA vs RRSP contributions
Both FHSA and RRSP contributions are tax-deductible, but the deduction can be timed strategically.
| Account | Deduction Strategy |
|---|---|
| FHSA | Contribute in a high-income year for maximum refund. Can defer deduction to a future higher-income year. |
| RRSP (for HBP) | Contribute and wait the 90-day seasoning period. Deduct in a high-income year. |
Tip: If you contribute to your RRSP in the same year as an HBP withdrawal, you must have held the funds for at least 90 days before withdrawing. Contributions made less than 90 days before the HBP withdrawal cannot be included in the HBP amount.
Real-world scenario: couple buying a $700,000 home
Both partners are first-time buyers with FHSAs and RRSPs.
| Source | Partner A | Partner B | Total |
|---|---|---|---|
| FHSA (each fully contributed since 2023) | $35,000 + growth | $35,000 + growth | ~$74,000 |
| HBP (from RRSP savings) | $30,000 | $25,000 | $55,000 |
| Total down payment | ~$129,000 | ||
| Remaining mortgage | ~$571,000 |
This couple would avoid CMHC mortgage insurance by exceeding the 20% down payment threshold on a $700,000 home, saving tens of thousands in insurance premiums — all without triggering any income tax.
Eligibility checklist for using both FHSA and HBP
| Condition | FHSA | HBP |
|---|---|---|
| First-time buyer (5-year look-back) | ✅ Required | ✅ Required |
| Canadian resident | ✅ Required | ✅ Required |
| Signed written purchase agreement | ✅ Required | ✅ Required |
| Principal residence intent | ✅ Required | ✅ Required |
| RRSP funds held 90+ days | N/A | ✅ Required |
| Age limit | 18 to 71 | 18 to 71 |