Using the FHSA and Home Buyers' Plan Together in Ontario

If you are saving for your first home, you may have money in a First Home Savings Account (FHSA), an RRSP, or both. A common question is whether you must pick one, or whether you can draw on both for the same down payment.

The short answer is that you can often use both, but each program has its own conditions and its own tax consequences if you miss a step. This article explains how they fit together and how to think about timing before closing.

Can you stack the two?

Yes. The FHSA and the RRSP Home Buyers' Plan (HBP) can be used together for the same qualifying home, as long as you meet all the conditions at the time of each withdrawal.

That last part is the key. Meeting the rules for one program does not satisfy the other, so you check each program separately on the day you take money out.

FHSA basics: who can open one and how much room you have

To open an FHSA you must be a resident of Canada, at least 18 (19 where that is the age of majority), and 71 or younger on December 31 of the year you open it. You must also be a first-time home buyer, meaning you have not lived in a qualifying home you owned or jointly owned as your principal residence in the current calendar year or the previous 4 calendar years.

If you have a spouse or common-law partner, you also must not have lived, in that same window, in a home your spouse or partner owned or jointly owned as your principal residence. That condition does not apply if you have no spouse or partner.

Participation room is $8,000 in the year you open your first FHSA, and the lifetime limit is $40,000. Unused room may be usable the following year.

HBP basics: the limit and the repayment

The HBP withdrawal limit is currently $60,000. Unlike an FHSA qualifying withdrawal, HBP money must be repaid to your RRSP, over up to 15 years.

For a first HBP withdrawal made between January 1, 2022 and December 31, 2025, and under an extension for first withdrawals between January 1, 2026 and December 31, 2028, the 15-year repayment period starts in the fifth year after the year of the first withdrawal instead of the second. It is worth confirming with the CRA or an accountant which rule applies to your withdrawal date.

The first minimum repayment is about one-fifteenth of the amount withdrawn, and after that the minimum is the remaining balance divided by the years left. A repayment counts for a year if made in that year or in the first 60 days of the next year, and is designated on Schedule 7. If you miss the minimum, the shortfall is added to your income as RRSP income on line 12900 of your return, and you can repay the full amount at any time, which reduces later minimums.

Sequencing the withdrawals before closing

An FHSA withdrawal is tax-free and does not have to be repaid only if you meet every condition. These include being a first-time home buyer, being a Canadian resident, intending to occupy the home as your principal residence within one year, and filing Form RC725 with the issuer.

The timing conditions are the ones people trip on. You need a written agreement to buy or build a qualifying home, with completion before October 1 of the year after the withdrawal, and you must have acquired the home no more than 30 days before withdrawing. If any condition is not met at the time of withdrawal, the amount is taxable and must be included in income.

• Confirm you meet the FHSA first-time buyer test, including the spouse or partner condition if it applies.
• Have a signed written agreement to buy or build before you withdraw.
• Complete Form RC725 with your FHSA issuer.
• Check HBP conditions separately for the same date.
• Plan your HBP repayment schedule and note the Schedule 7 designation.

What to do next

Line up your closing date, your agreement of purchase and sale, and the dates you plan to withdraw, then check each against the conditions above. Down payment size also matters: federal guidance sets a minimum of 5% for homes of $500,000 or less, and below 20% down you will typically need mortgage loan insurance.

Because a missed condition can turn a withdrawal into taxable income, speak with an accountant, your FHSA or RRSP issuer, or a lawyer before you take money out.

Frequently asked questions