FHSA vs HBP

Last updated: October 10, 2023

How is the FHSA different from the HBP?

You can use both a First Home Savings Account (FHSA) and the Home Buyers’ Plan (HBP) to purchase a new home, provided you meet each plan’s eligibility requirements. But the main difference between an FHSA and an HBP is that the HBP requires you to repay your withdrawn funds, whereas the FHSA doesn’t require any repayment.

How is the FHSA different from the HBP?  The HBP lets you withdraw up to $35,000 from your RRSP – couples can access a total of $70,000 – to buy or build your first home in Canada. When you withdraw these funds, it’s like you’re borrowing from your RRSP. So you’re expected to pay the money back within a specific period of time. Otherwise, you’ll have to pay taxes.

With an FHSA, you can contribute up to $8,000 per year, with a lifetime contribution limit of $40,000. Your contributions are tax-deductible and your qualifying withdrawals are tax-free  when you buy a qualifying home. You’re not borrowing any money, so there’s nothing to pay back. Learn more about FHSA contributions. 

FHSA

HBP

Eligibility
First-time homebuyers living in Canada. See rules.

Contribution limit?
$8,000 per year

Maximum withdrawal
You can withdraw as much as you like from your FHSA. 

Tax-free withdrawals
Only if you’re buying a qualifying home. See rules.

Eligibility
First-time homebuyers living in Canada. See rules.

Contribution limit?
None, because you’re withdrawing from your RRSP, not contributing to a separate plan.

Maximum withdrawal
Up to $35,000 per person. 

Tax-free withdrawals
Only if you make repayments within a specified timeframe. See rules.

Can I use the FHSA and HBP together?

Yes, you can use both to buy the same home. The government initially said you couldn’t combine the FHSA and HBP on the purchase of the same qualifying home. However, revised legislation allows you to use both the FHSA and HBP for the same qualifying home.

Can my spouse and I both open an FHSA to buy the same home?

Yes, you and your spouse can each open your own individual FHSA. You can then use those two FHSA accounts to buy the same qualifying home so long as you’re both first-time homebuyers. 

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