Can I Use an FHSA and an RRSP Together for My First Home Down Payment in Ontario?
Yes, you can use both an FHSA and the RRSP Home Buyers' Plan for the same qualifying home, as long as you meet all the conditions at the time of each withdrawal. They work differently, though, so it helps to know which does what before you decide where to put your money first.
An FHSA gives you $8,000 of participation room in the year you open your first account, with a lifetime limit of $40,000, and unused room may be usable the following year. A qualifying FHSA withdrawal is tax-free and does not have to be repaid, while the Home Buyers' Plan lets you withdraw up to $60,000 that must be repaid to your RRSP over up to 15 years. If you miss a minimum HBP repayment, the shortfall is added to your income.
To open an FHSA you must be a first-time home buyer, and if you have a spouse or common-law partner, you also must not have lived in a home they owned in the same look-back period. How much tax you save from contributions depends on your income and other room, so confirm the details with an accountant.
Key takeaways
- You can use an FHSA and the RRSP Home Buyers' Plan together for the same qualifying home, as long as you meet all the conditions at the time of each withdrawal.
- FHSA participation room is $8,000 in the year you open your first account, the lifetime limit is $40,000, and unused room may be usable the following year.
- A qualifying FHSA withdrawal is tax-free and does not have to be repaid, but if any condition is not met at the time of withdrawal the amount is taxable.
- Home Buyers' Plan withdrawals must be repaid to your RRSP over up to 15 years, and any missed minimum repayment is added to your income.