Buying your first house in Durham Region means pulling together a down payment that keeps getting bigger every year. Two registered accounts can do most of the heavy lifting, and you are allowed to use both at once. Here is how the FHSA and the RRSP Home Buyers’ Plan work together.
Key takeaways
- The FHSA gives you a tax deduction on the way in and a tax-free withdrawal on the way out. No other Canadian account does both.
- You can contribute $8,000 a year up to a $40,000 lifetime cap, and carry forward up to $8,000 of unused room into the next year.
- The RRSP Home Buyers’ Plan lets you withdraw up to $60,000 per person, but it is a loan to yourself that you repay over 15 years.
- You can use the FHSA and the Home Buyers’ Plan on the same home. One buyer can stack $100,000, and a couple can roughly double it.
What a first home savings account actually is.
The First Home Savings Account (FHSA) is a registered account built for one job: helping you buy your first home. It launched in 2023 and combines the best parts of two accounts you already know. Contributions are tax-deductible like a registered retirement savings plan (RRSP), and qualifying withdrawals come out completely tax-free like a tax-free savings account (TFSA).
That two-sided benefit is what makes it unusual. You get a deduction the year you contribute, your money grows with no tax on the gains, and when you pull it out for a qualifying home purchase, you pay nothing. No other registered account in Canada gives you both ends of that deal.
A qualifying home means a housing unit in Canada that you plan to live in as your principal place of residence within one year of buying or building it. You can read the official rules on the CRA first home savings account page.
Who is eligible to open an FHSA.
You can open an FHSA if you meet four conditions:
- You are a resident of Canada.
- You are at least 18, or the age of majority in your province, and under 71.
- You are a first-time home buyer.
- You have a valid social insurance number.
For the FHSA, first-time home buyer has a specific meaning. You qualify if you did not live in a home that you owned, or that your spouse or common-law partner owned, at any time in the current calendar year or the previous four calendar years. So even if you owned a home years ago, you can count as a first-time buyer again once enough time has passed.
How much you can put in, and the carry-forward rule.
The numbers are simple. The annual contribution limit is $8,000, and the lifetime contribution limit is $40,000.
Here is the part most people miss. If you do not use your full $8,000 in a year, you can carry forward up to $8,000 of unused FHSA contribution room into the next year. That means the most you can contribute in a single year is $16,000, as long as you stay under the $40,000 lifetime cap. Your carry-forward room only starts building after you open the account, so opening an FHSA early, even with a small deposit, starts the clock in your favour.
Because the FHSA has both an annual contribution limit and a lifetime contribution limit, it pays to plan your contributions around the years your income, and your tax rate, are highest. The CRA tracks your FHSA contribution room, and you can check it in your CRA My Account.
Every dollar you contribute lowers your taxable income for that year. Put $8,000 into your FHSA and, at a typical Ontario marginal rate of around 30 percent, you cut your tax bill by roughly $2,400. That refund is money you can drop straight back into the account.
What you can hold inside an FHSA.
An FHSA works as an investment account. It can hold the same investments as a TFSA or RRSP: cash, guaranteed investment certificates, mutual funds, exchange-traded funds, stocks and bonds. If your purchase is a few years out, that growth can add real money to your down payment, and inside the FHSA it grows tax-free. Many first-time buyers keep their FHSA in a guaranteed investment certificate when the purchase is close, then lean on growth investments when the move is further off.
The RRSP Home Buyers’ Plan, your second lever.
Your retirement savings can pull double duty. The Home Buyers’ Plan (HBP) lets you withdraw from your RRSP to buy or build a first home without paying tax on the withdrawal. The current limit is $60,000 per person, up from $35,000 for withdrawals made after 16 April 2024.
The catch is that the HBP is really a loan to yourself. You have to pay the money back into your RRSP over 15 years. Miss a required yearly repayment and that portion gets added to your income on line 12900 and taxed like regular income.
Two timing rules matter before you withdraw:
- The 90-day rule. Money has to sit in your RRSP for at least 90 days before you take it out under the HBP, or you cannot deduct that contribution.
- Repayments start later than you expect. For a withdrawal made in 2025, a temporary deferral pushes your first required repayment all the way to 2030.
You can read the official rules on the CRA Home Buyers’ Plan page.
Can you use both the FHSA and the Home Buyers’ Plan?
Yes. This is the move most first-time buyers walk right past. The CRA lets you use both the FHSA and the Home Buyers’ Plan for the same home purchase, as long as you meet the conditions for each withdrawal at the time you make it.
Stack them and the math gets serious. One person can build up to $40,000 in an FHSA and withdraw up to $60,000 through the HBP. That is $100,000 toward a single home before any investment growth. A couple who both qualify can roughly double it.
Here is how the FHSA, the Home Buyers’ Plan and a TFSA compare when you are saving for a down payment:
| Feature | FHSA | Home Buyers’ Plan | TFSA |
|---|---|---|---|
| Tax deduction going in | Yes | Yes (RRSP contribution) | No |
| Tax-free withdrawal for a home | Yes | Yes | Yes |
| Do you repay it? | No | Yes, over 15 years | No |
| Cap toward your first home | $40,000 lifetime | $60,000 | Whatever you’ve saved |
A Durham Region example.
Say Priya and Dev are renting in Ajax and want to buy a house in Whitby. Both are first-time buyers, and neither has owned a home in the last five years.
Stacking two FHSAs and the Home Buyers’ Plan
In 2026 they each open an FHSA and contribute $8,000. They keep that up for four years and put in $32,000 each, or $64,000 combined. Those contributions also hand them about $2,400 each in tax savings every year, which they funnel right back into the accounts.
Each of them also has roughly $30,000 sitting in an RRSP. When they are ready to buy, they each withdraw that $30,000 under the Home Buyers’ Plan, which adds $60,000 to the pile.
| Two FHSAs (contributions) | $64,000 |
| Home Buyers’ Plan (two RRSPs) | $60,000 |
| Toward their Whitby home | $124,000 |
And that is before counting the growth their investments earned along the way. The FHSA money is theirs to keep. The $60,000 from the HBP is the part they will repay into their retirement savings over the following 15 years.
What happens if you don’t buy, or time runs out.
An FHSA does not stay open forever. It has to close by the end of the year that includes the earliest of three dates: the 15th anniversary of opening it, the year you turn 71, or the year after your first qualifying withdrawal.
If you never buy a home, you do not lose the money. You can transfer the full balance, including all the growth, into your RRSP or RRIF with no tax and without using any of that registered room. You only pay tax if you take the cash out directly instead of buying a home or moving it to your RRSP. So the downside of opening one early is close to nothing.
Plan the order before you open anything.
Stacking an FHSA and the Home Buyers’ Plan can put tens of thousands of extra dollars behind your first home, but the order you contribute, withdraw and repay in changes how much you actually keep. We help first-time buyers across Oshawa, Whitby, Ajax and the rest of Durham Region build a plan that fits their timeline and income. Book a free 15-minute call and we will map out your numbers. You can also see how we handle personal tax and planning on our services page.
This article is general information, not tax or financial advice. Contribution limits, withdrawal rules and deadlines can change. Confirm the current figures with the CRA or speak with a CPA about your own situation before you act.
