FHSA vs the Home Buyers’ Plan
It isn’t either/or — they stack on the same purchase. What matters is the order you use them in, and the two timing rules that quietly cost people money.
Both, on the same purchase — they are designed to stack. The FHSA is the better instrument where you have the choice: contributions are tax-deductible going in and withdrawals for a qualifying first home come out tax-free with nothing to repay, up to $8,000 a year and $40,000 lifetime. The Home Buyers’ Plan lets you withdraw up to $60,000 per buyer from an RRSP, but it is a loan from yourself, repayable over 15 years. Two timing rules cost people real money: FHSA contribution room only starts accruing once the account is open, so open it early even with a token deposit; and RRSP funds generally must sit for 90 days before an HBP withdrawal, which catches buyers who contribute and withdraw in the same month.
The difference that matters
- FHSA — $8,000/year, $40,000 lifetime. Deductible in, tax-free out for a qualifying first home, nothing to repay. Strictly better than the HBP dollar for dollar, which is why it goes first.
- Home Buyers’ Plan — up to $60,000 per buyer from your RRSP ($120,000 for a couple), tax-free at withdrawal but repayable over 15 years. Miss a repayment year and that portion becomes taxable income.
The two timing rules
- Open the FHSA now. Room accrues only once the account exists — an unopened FHSA is not quietly banking $8,000 a year for you. Opening it with $50 starts the clock.
- The 90-day rule. RRSP contributions generally need to sit 90 days before an HBP withdrawal. Contribute and withdraw in the same month and the deduction can be denied.
General information, not tax, legal or lending advice. Program rules and lender policies change and personal eligibility has edge cases — confirm yours with the CRA, an accountant, or a licensed mortgage professional.
If you’re on a work permit
Two separate rules that get conflated: you may be able to open and contribute to an FHSA as a Canadian tax resident, and still be barred from purchasing under the federal prohibition on non-Canadian purchases, which runs to January 1, 2027 with specific exemptions. Saving is not buying. The work-permit guide walks the exemption checklist — sort eligibility before you build a purchase timeline on it.
Your savings plan, sequenced
Tell me what you have where — FHSA, RRSP, cash — and your target timeline, and I’ll send back the order of operations: what to open, what to move, when, and what it adds up to as a down payment. Paired with the full program stack. One reply, no drip campaign.
Last updated 2026-08-26 · Written by Mohammad Emon, REALTOR® (SRES®) & Licensed Property Manager, KO Realty · RECA licence LIC-00666633