11 November 2026
A first-time buyer in Canada can draw on up to $60,000 from an RRSP under the Home Buyers' Plan and, separately, build up to $40,000 of tax-advantaged savings in a First Home Savings Account. The two programs can be used for the same home. That makes the choice less an either-or than a question of order, limits and deadlines, and the details decide whether the money works as intended.
FHSA and HBP at a glance
The First Home Savings Account, or FHSA, is a registered account built for one purpose: saving for a first home. According to the Canada Revenue Agency, your FHSA participation room in the year you open your first account is $8,000. The lifetime limit, set out in the agency's tax tips on making the most of an FHSA, is $40,000. That is the ceiling on what you can contribute over the life of the account, no matter how many years it takes to reach it.
The Home Buyers' Plan, or HBP, works differently. It is not a separate account but a rule that lets you take money out of your own RRSP. The Financial Consumer Agency of Canada says the HBP lets you withdraw up to $60,000 from your RRSP tax-free to buy your first home. That $60,000 maximum applies to withdrawals made after April 16, 2024, so anyone reading older material that quotes a lower figure should check the date on it.
The most important difference is what happens afterward. HBP withdrawals must generally be repaid to your RRSP over 15 years, according to the CRA. The HBP is effectively a loan from your own retirement savings, one you owe back to yourself on a schedule. The FHSA, by contrast, is a dedicated savings vehicle with its own contribution cap and its own conditions for taking money out.
For a buyer with years to save, the FHSA is the account to build deliberately. For a buyer who already has a sizeable RRSP, the HBP may be the faster route to a down payment. Many buyers will have some of each, which is why the rules for using both matter.
How much you can save and withdraw
The two programs measure different things, so a direct comparison needs care. The FHSA limits describe how much you can put in. The HBP limit describes how much you can take out of an existing RRSP. The table below sets the main federal figures side by side, including the First-Time Home Buyers' Tax Credit, covered in more detail later.
| Program | Main limit | What the limit measures | Key condition |
|---|---|---|---|
| FHSA | $8,000 | Participation room in the year you open your first FHSA | Opening year only; the lifetime cap still applies |
| FHSA | $40,000 | Lifetime limit | Withdrawal needs a written agreement to buy or build a qualifying home |
| HBP | $60,000 | Maximum RRSP withdrawal, for withdrawals after April 16, 2024 | Generally repaid to your RRSP over 15 years |
| First-Time Home Buyers' Tax Credit | $1,500 | Maximum non-refundable credit | Claimed where you are eligible |
Reading the table, a few practical points follow. The $8,000 figure is a starting point rather than a ceiling on your whole FHSA journey. It describes your room in the first year, and the $40,000 lifetime figure is the number to plan around if you intend to use the account fully. Someone who opens an FHSA and contributes the first-year maximum has put a fifth of the lifetime limit to work in a single year.
The HBP's $60,000 is a ceiling, not a target. Taking the full amount means committing to repay it, and the 15-year schedule is the repayment window the CRA describes as the general rule. Buyers who borrow heavily from an RRSP should treat the repayment as a new annual obligation in the household budget, because the money has to return to the RRSP over time.
Add the two together and the theoretical maximum is $100,000, but only for someone who has fully funded an FHSA to its lifetime limit and has at least $60,000 sitting in an RRSP. Most buyers will land well below that. The point of knowing the ceilings is to see how much room exists, not to assume you need to use all of it.
Rules that decide whether a withdrawal qualifies
The FHSA is not a free-for-all once the money is in. A qualifying FHSA withdrawal requires a written agreement to buy or build a qualifying home, with completion before October 1 of the year after the withdrawal, according to the CRA's guidance on FHSA withdrawals and transfers out. Two requirements are bundled in that sentence, and both are easy to underestimate.
The first is the paperwork. A written agreement means a document that shows you have committed to buying or building, such as a signed purchase agreement or a building contract. A verbal understanding with a seller or a builder is not what the rules describe. Buyers who withdraw money before they have something signed risk a withdrawal that does not meet the test.
The second is timing. The deadline is October 1 of the year after the withdrawal. If you withdraw in 2027, for example, the purchase or build must be completed before October 1, 2028. That window is generous for a resale purchase with a standard closing, but it can be tight for a new build, where construction delays are common. Anyone buying a home that has not yet been finished should look closely at the builder's expected completion date before pulling money out of the account.
The CRA also attaches conditions about who qualifies as a first-time buyer and where you live. Those tests apply at the time you make a withdrawal, and the agency's guidance says you can use the HBP and make a qualifying FHSA withdrawal for the same home only if you meet all conditions at the time of each withdrawal. In practice, that means reading the CRA's current criteria before each step rather than assuming that eligibility on the day you opened the account carries through to the day you take the money out.
A simple habit helps: keep copies of every agreement, the closing date and the dates of each withdrawal together in one file. If the CRA ever asks how a withdrawal fit the rules, those documents answer the question.
What counts as a qualifying home in Canada
The definition of a qualifying home is broader than many first-time buyers expect. For FHSA purposes, it is a housing unit located in Canada. The CRA's list includes single-family homes, townhouses and condominium units, as well as apartments in duplexes, triplexes, fourplexes or apartment buildings.
Two things stand out. First, the location test is firm: the unit must be in Canada. A property abroad does not qualify, however it is held or financed. Second, the range of housing types means buyers in expensive markets are not forced into detached houses. A condo in a high-rise, a townhouse in a suburban development or a unit in a small multi-unit building all fit the description.
The multi-unit categories matter in cities where buyers often start with a share of a larger building. Someone who buys one apartment in a fourplex is buying an apartment in a fourplex, which is on the CRA's list. The same applies to a unit in a duplex or triplex. Buyers considering such a purchase should still confirm the details of the unit they are buying against the agency's definition, since the description is about a housing unit rather than a whole building.
The definition also applies to a home you plan to build, because the FHSA rules cover agreements to buy or build. A buyer who signs a contract to have a home constructed is working with the same qualifying-home test and the same October 1 completion deadline.
How to combine FHSA, HBP and the first-time buyers' tax credit
The most useful sentence in the CRA's guidance for buyers with both accounts is the simplest: you can use the Home Buyers' Plan and make a qualifying FHSA withdrawal for the same qualifying home, provided you meet all conditions at the time of each withdrawal. The programs are not competitors. They can be stacked on a single purchase.
A sensible way to think about it is by source of funds. The FHSA money is the dedicated savings you built for this purpose. The HBP money is RRSP savings you are borrowing against yourself, with a repayment schedule attached. Because the HBP carries a repayment obligation over 15 years, some buyers will prefer to draw on the FHSA first and use the HBP only for the remaining gap. That is a planning judgment rather than a rule, and the right mix depends on your own savings, your budget after closing and how much repayment you can comfortably carry.
The federal First-Time Home Buyers' Tax Credit adds a smaller layer. The CRA describes it as a non-refundable tax credit of up to $1,500, listed in the agency's guide to taxes and housing benefits. Non-refundable means it can reduce the tax you owe but will not generate a refund beyond that amount. It does not replace the FHSA or HBP and it will not fund a down payment, but it is a claim worth making where you are eligible when you file your return for the year you buy.
A short checklist for the buying year captures the practical sequence:
Before withdrawing from either program, confirm that the home is in Canada and fits the qualifying-home description. Have the written agreement in hand before an FHSA withdrawal, and note the October 1 deadline for completion. Check that you meet each condition on the date of every withdrawal, not just the first. And when you file, look at whether the $1,500 credit applies to you.
The programs reward preparation more than speed. A buyer who opens an FHSA early, understands the HBP's repayment terms and keeps clean records can use all three measures without a surprise. The best first step is to read the CRA's own pages for the current conditions on each program, because the agency's wording governs what counts.