What is the difference between FHSA and RRSP Home Buyers Plan?

The FHSA (First Home Savings Account) allows up to $40,000 in tax-deductible contributions with tax-free withdrawals for a home purchase — you never repay it. The RRSP Home Buyers' Plan lets you borrow up to $60,000 from your RRSP tax-free, but you must repay it over 15 years. You can use both together for a first home purchase.

How much can I contribute to an FHSA per year?

You can contribute up to $8,000 per year to an FHSA, with a lifetime maximum of $40,000. Unused contribution room carries forward one year. Contributions are tax-deductible from your income, similar to an RRSP.

Can I use both FHSA and RRSP HBP to buy my first home?

Yes. You can withdraw from both your FHSA (up to $40,000 tax-free, no repayment required) and your RRSP via the Home Buyers' Plan (up to $60,000, must repay over 15 years) for the same first home purchase. Combined, that could be up to $100,000 in registered savings for your down payment.

Who is eligible for the FHSA in Canada?

To open an FHSA you must be a Canadian resident, at least 18 years old, and a first-time home buyer (meaning you have not lived in a home you or your spouse owned in the current year or the preceding four calendar years). Permanent residents and work permit holders who are Canadian residents are eligible.

FHSA vs RRSP Home Buyers' Plan: Which Should You Use?

Canada offers two powerful registered account programs to help first-time buyers save: the First Home Savings Account (FHSA) and the RRSP Home Buyers' Plan (HBP). Here's how to compare them — and how to use both together to maximize your tax advantage.

First Home Savings Account (FHSA)

Launched in 2023, the FHSA is the most tax-advantaged way to save for a first home in Canadian history.

Annual contribution limit: $8,000/year
Lifetime limit: $40,000
Tax deduction: Contributions reduce your taxable income (like an RRSP)
Tax-free growth: Investments grow tax-free inside the account
Tax-free withdrawal: Withdrawals for a qualifying first home are completely tax-free (like a TFSA)
Carry-forward: Unused room carries forward one year (max $8,000)
Account lifespan: Must use within 15 years of opening, or by age 71

The FHSA is a "triple tax advantage": tax deduction on the way in, tax-free growth, and tax-free withdrawal. Nothing else in Canadian tax law offers all three.

RRSP Home Buyers' Plan (HBP)

The HBP has existed since 1992 and allows you to "borrow" from your RRSP for a first home.

Maximum withdrawal: $60,000 per person ($120,000 for a couple)
Tax treatment: Withdrawal is not taxed at the time — but must be repaid
Repayment period: 15 years, starting 2 years after withdrawal
If not repaid: Annual repayment amount is added to taxable income
RRSP must have been held 90+ days before withdrawal

Side-by-Side Comparison

Feature	FHSA	RRSP HBP
Max contribution	$40,000 lifetime	Based on RRSP balance (up to $60K withdrawal)
Tax deduction	✅ Yes	✅ Yes (on contribution)
Repayment required	❌ No	✅ Yes (over 15 years)
Growth tax-free	✅ Yes	✅ Yes (inside RRSP)
Use both together	✅ Yes — you can use both simultaneously

The Strategy: Use Both Together

You are not forced to choose. The optimal approach for most first-time buyers:

Max out your FHSA first. Open it now. Contribute $8,000/year every year you can. The tax deduction + tax-free withdrawal combination is unmatched.
Also contribute to your RRSP if you have additional savings capacity. The RRSP HBP allows you to withdraw up to $60,000 that you've already built up.
At purchase time: Withdraw from your FHSA (no repayment) and use the RRSP HBP (repay over 15 years).

Source: Canada Revenue Agency, Government of Canada. FHSA rules effective April 2023. Updated January 2026.

FHSA vs RRSP Home Buyers' Plan: Which Should You Use?

First Home Savings Account (FHSA)

RRSP Home Buyers' Plan (HBP)

Side-by-Side Comparison

The Strategy: Use Both Together

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