First-time buyers
FHSA vs RRSP Home Buyers' Plan: Which Should You Use First?
Both let you put money toward your first home without paying tax on the way out, but they work differently. The FHSA is built purely for a first home: you can contribute up to $8,000 a year, $40,000 lifetime, and once it's withdrawn for a qualifying purchase, it's yours — no repayment required.
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The RRSP Home Buyers' Plan lets a first-time buyer withdraw up to $60,000, tax-free at the time — but it's a loan from yourself: you repay it back into your RRSP over 15 years, or it gets added to your taxable income. For most people building a down payment from scratch, filling the FHSA first makes sense, then layering in the Home Buyers' Plan, since you can use both toward the very same home.
These are federal programs — the rules are the same whether you're buying in Vaughan or anywhere else in Canada. What I help with is figuring out the order that fits your own savings and timeline as an Ontario buyer.
Confirm current contribution limits and rules at canada.ca before relying on these numbers — they can change.
