FHSA vs HBP
Two first-home savings vehicles, designed to be stacked. FHSA is tax-deductible-in / tax-free-out with no repayment. HBP is a tax-free RRSP loan to yourself with a 15-year repayment.
Side-by-side comparison
| Feature | FHSA | HBP |
|---|---|---|
| Contribution / withdrawal cap | $8k/yr, $40k lifetime | $60k per person from existing RRSP |
| Tax deduction on contribution | Yes (like RRSP) | N/A (uses existing RRSP balance) |
| Tax on qualified withdrawal | Zero — tax-free | Zero (but 15-year repayment) |
| Repayment required? | No | Yes — 1/15 per year for 15 years |
| Withdrawal window | 15 years from open date | Within 30 days of closing |
| If you don't buy a home | Roll to RRSP/RRIF (room preserved) or taxable | No HBP withdrawal occurred |
| First-time buyer rule | Yes — 4-year ownership lookback | Yes — 4-year ownership lookback |
| Can be stacked with HBP? | Yes — explicitly allowed | Yes — explicitly allowed |
| Investment options | Same as RRSP/TFSA (stocks, ETFs, GICs, MFs) | Whatever your RRSP holds |
| CRA reporting | T4FHSA slip; tracked on T1 | T4RSP code 27 + Schedule 7 |
Worked example: maxed FHSA + HBP for a couple
Two first-time buyers, each with $40,000 FHSA at age 30 and $60,000 HBP capacity in existing RRSPs. Combined first-home capital available at the time of purchase:
| Source | Per person | Couple combined | Net of tax / repayment |
|---|---|---|---|
| FHSA balance (5 years × $8k) | $40,000 | $80,000 | $80,000 (zero tax, zero repayment) |
| HBP RRSP withdrawal | $60,000 | $120,000 | $120,000 today (~$8k/yr repayment per person for 15y) |
| Home Buyers' Amount credit | $1,500 (federal) | $1,500 (one credit per couple) | $1,500 |
| Total at closing | $101,500 | $201,500 | $201,500 (with deferred HBP repayment) |
Assumes both partners contributed the FHSA $8k cap for 5 years before purchase and each has $60k of RRSP balance available for HBP. Investment growth inside FHSA can push the realized FHSA balance above $40k.
Frequently asked questions
What's the headline difference between FHSA and HBP?
The FHSA is a dedicated first-home wrapper: contributions are tax-deductible (like RRSP) AND withdrawals for a qualifying first home are 100% tax-free with no repayment required. The Home Buyers' Plan (HBP) lets you withdraw from an existing RRSP — tax-free at the time, but you must repay the withdrawn amount over 15 years or it gets added to your taxable income.
What are the contribution / withdrawal limits?
FHSA: $8,000/year, $40,000 lifetime cap, room starts the year you open the account. HBP: up to $60,000 per person from your existing RRSP (raised from $35,000 effective April 16, 2024). For a couple buying jointly, that's $80,000 from FHSA + $120,000 from HBP = $200,000 of tax-advantaged first-home capacity.
Can I use both for the same home purchase?
Yes — the FHSA and HBP can be stacked. The CRA explicitly allows this since the FHSA was introduced in 2023. You also get the $1,500 Home Buyers' Amount tax credit on top. Use our First-Home Combined Planner to see the total $101k+ capacity for a typical first-time buyer.
Do I have to repay FHSA withdrawals?
No. FHSA withdrawals for a qualifying first home are tax-free with zero repayment obligation — unlike HBP. This is the single biggest advantage of FHSA over HBP. If you don't buy a home within 15 years, the FHSA balance must be transferred to an RRSP/RRIF (does not affect RRSP room) or withdrawn as taxable income.
How does HBP repayment work?
You must repay 1/15 of the withdrawn amount each year for 15 years, starting the second calendar year after withdrawal. Repayments are made by contributing to your RRSP and designating the contribution as an HBP repayment on Schedule 7. Missed repayments are added to taxable income that year — losing both the tax deferral and the room.
Who qualifies as a first-time home buyer?
For both FHSA and HBP: you must not have lived in a home you (or your spouse/common-law partner) owned during the current year or any of the four preceding calendar years. The four-year clock starts from January 1 of the fourth year before withdrawal. Spousal-relationship breakdowns may have an exception — see CRA T4040.
Which one should I prioritize if I have to choose?
FHSA almost always wins as a first priority because: (1) tax-deductible contributions like an RRSP, (2) zero repayment obligation, (3) the $40k cap is independent of your RRSP. Only fall back to HBP if you have built up RRSP balance and exhausted FHSA room. The optimal sequence for most first-time buyers is: max FHSA → max HBP → TFSA → save in non-registered.
Can I move money between FHSA, RRSP, and HBP?
You can transfer between FHSA and RRSP without affecting RRSP room (one-way: FHSA → RRSP keeps the deduction; RRSP → FHSA does NOT generate a new deduction). HBP-withdrawn RRSP money keeps its repayment schedule regardless. You cannot use FHSA money for HBP — they are separate vehicles.
Try the relevant calculators
- FHSA Calculator — contribution, tax savings, and growth projection
- HBP Calculator — withdrawal, 15-year repayment schedule, and missed-repayment tax cost
- First-Home Combined Planner — stack FHSA + HBP + Home Buyers' Amount on one page
- Property Transfer Tax Calculator — provincial land transfer tax and first-time buyer rebates
- RRSP Calculator — to size your HBP capacity