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Combining FHSA with the RRSP Home Buyers' Plan

Learn how to combine the FHSA and RRSP Home Buyers’ Plan for a more powerful down payment strategy

For first-time homebuyers, both the First Home Savings Account (FHSA) and the RRSP Home Buyers’ Plan (HBP) offer valuable tax advantages. While they are separate programs, they can be used together, giving you an opportunity to significantly increase the funds available for your first home purchase.

Understanding how these two programs work in tandem is key to maximizing your down payment and tax efficiency.

What Is the RRSP Home Buyers’ Plan (HBP)?

The Home Buyers’ Plan (HBP) allows you to withdraw up to $35,000 from your RRSP, tax-free, to buy or build your first home. If you’re purchasing with a partner who is also eligible, each of you can withdraw $35,000, totaling $70,000 per couple.

Key aspects of the HBP:

  • Withdrawals are tax-free at the time of withdrawal, provided they are repaid.

  • You must repay the amount back into your RRSP over a maximum of 15 years.

  • If repayments are missed, the amount is added to your taxable income.

Note: While useful, the repayment requirement makes the HBP a temporary loan from your RRSP rather than a permanent withdrawal.

How the FHSA Complements the RRSP HBP

The FHSA provides a different—and often more advantageous—approach:

  • Contributions are tax-deductible, reducing your taxable income like an RRSP.

  • Withdrawals are tax-free when used for a qualifying first home purchase.

  • Unlike the HBP, FHSA withdrawals do not need to be repaid.

Note: Because the FHSA doesn’t require repayment, it is generally more tax-efficient for first-time homebuyers. However, combining both programs can amplify your savings capacity.

Using FHSA and HBP Together: How Much Can You Withdraw?

The key advantage is that the FHSA and HBP can be used in combination:

Program Individual Maximum Withdrawal Couple Maximum Withdrawal
FHSA $40,000 $80,000
RRSP HBP $35,000 $70,000
Combined Total $75,000 $150,000

At Optimize, we design strategies that leverage both programs to maximize your purchasing power.

Strategic Considerations When Combining FHSA and HBP

When deciding how to use both accounts together, consider:

  • Prioritize maximizing FHSA contributions first, as withdrawals don’t require repayment.

  • Use the HBP to supplement your down payment, knowing you’ll need to plan for annual repayments.

  • Consider your homebuying timeline: FHSAs require time to accumulate contributions and growth, while RRSPs may offer immediate funds.

  • Assess your RRSP contribution room and tax bracket to determine the most efficient way to allocate savings.

Optimize helps you evaluate these factors to build a coordinated, tax-smart savings plan.

How Optimize Helps You Use FHSA and HBP Together Effectively

At Optimize, we ensure you’re taking full advantage of both programs to support your homebuying goals. We help you:

  • Strategically allocate contributions between your FHSA and RRSP, based on tax efficiency and timelines.

  • Plan coordinated withdrawals, ensuring compliance with FHSA and HBP rules.

  • Manage HBP repayment schedules, integrating them into your long-term financial plan.

  • Monitor your overall savings strategy, balancing homeownership goals with retirement and other priorities.

With Optimize’s guidance, combining FHSA and RRSP HBP becomes a seamless, tax-efficient approach to building your first home down payment.