FHSA and RRSP Home Buyers' Plan: Complete BC Guide for 2026
Two federal programs can dramatically increase a first-time buyer's down payment — the First Home Savings Account (FHSA) and the RRSP Home Buyers' Plan (HBP). Here is exactly how both work, how to combine them, and what BC realtors need to know to guide clients effectively.
Quick Comparison: FHSA vs. RRSP Home Buyers' Plan
| Feature | FHSA | RRSP HBP |
|---|---|---|
| Launched | April 2023 | 1992 |
| Annual contribution limit | $8,000 | No separate limit — contributes to RRSP |
| Lifetime limit | $40,000 | $60,000 (raised from $35K in 2024) |
| Tax deduction on contributions | Yes — like RRSP | No (already contributed to RRSP) |
| Tax on withdrawals for home purchase | None | None (but repayment required) |
| Repayment required after withdrawal? | No | Yes — 1/15 per year over 15 years |
| Investment growth | Tax-free | Tax-deferred until withdrawal |
| What if you don't buy? | Can transfer to RRSP tax-free | Funds stay in RRSP |
| Account expiry | Dec 31 of year you turn 71 | N/A (no expiry on RRSP) |
| First-time buyer requirement | Yes — 4-year lookback | Yes — 4-year lookback |
| Must be Canadian resident | Yes | Yes |
| Qualifying home requirement | Yes — must be in Canada | Yes — must be in Canada |
The First Home Savings Account (FHSA) — Deep Dive
The FHSA is a registered account that combines the best features of an RRSP (contributions are tax-deductible) and a TFSA (qualifying withdrawals are tax-free). It was introduced in April 2023 specifically to help Canadians save for their first home.
Who Qualifies to Open an FHSA?
To open an FHSA, you must:
- → Be a Canadian resident
- → Be 18 years of age or older (and not older than 71)
- → Be a first-time home buyer — meaning you have not lived in a qualifying home that you (or your spouse/common-law partner) owned at any time in the current calendar year or the preceding 4 calendar years
Important:You can open the FHSA even if you're not sure you'll buy a home. The account has a 15-year lifetime — if you don't buy within 15 years of opening (or by December 31 of the year you turn 71), you can transfer the balance to an RRSP or RRIF tax-free, or withdraw it (and pay tax on the amount).
FHSA Contribution Rules
| Rule | Details |
|---|---|
| Annual limit | $8,000 per year |
| Lifetime limit | $40,000 total |
| Carry-forward | Unused room carries forward 1 year only — maximum carryforward is $8,000 |
| Tax deduction | Contributions are deductible from income in the year contributed, reducing your tax bill |
| Spousal contributions | Spouses cannot contribute to each other's FHSA — each must open their own |
| Over-contribution penalty | 1% per month tax on amounts over the $40,000 lifetime limit |
| Qualifying investments | Same as TFSA — stocks, ETFs, mutual funds, GICs, bonds, etc. |
FHSA Carry-Forward Example
| Year | Annual Limit | Amount Contributed | Room Carried Forward |
|---|---|---|---|
| 2023 (opened) | $8,000 | $0 | $8,000 |
| 2024 | $8,000 + $8,000 CF = $16,000 | $10,000 | $6,000 |
| 2025 | $8,000 + $6,000 CF = $14,000 | $14,000 | $0 |
| 2026 | $8,000 + $0 CF = $8,000 | $8,000 | Lifetime max reached at $40K |
Note: Carry-forward room accumulates from the year after the FHSA is opened, not the year of opening.
FHSA Qualifying Withdrawal Rules
To make a qualifying (tax-free) FHSA withdrawal, you must:
- → Be a first-time home buyer at the time of withdrawal (same 4-year lookback rule)
- → Have a written agreement to buy or build a qualifying home before October 1 of the year following the withdrawal
- → Intend to occupy the home as your principal place of residence within one year of buying or building
- → The home must be in Canada
Unlike the RRSP HBP, there is no repayment requirementafter an FHSA qualifying withdrawal. Once the money is out and used for the home, you're done. The account must be closed by December 31 of the year following the qualifying withdrawal.
The RRSP Home Buyers' Plan (HBP) — Deep Dive
The Home Buyers' Plan allows first-time buyers to withdraw up to $60,000 from their RRSP without paying income tax at withdrawal — but the amount must be repaid to the RRSP over 15 years. The limit was raised from $35,000 to $60,000 effective for withdrawals made after April 16, 2024.
HBP Key Rules
| Rule | Details |
|---|---|
| Maximum withdrawal | $60,000 per person (raised from $35,000 in April 2024) |
| Couple maximum | $120,000 combined (if both qualify) |
| 90-day rule | RRSP funds must have been in the account for at least 90 days before withdrawal or they are not deductible |
| Repayment start | No repayment required in the first 2 years after withdrawal |
| Annual repayment | 1/15th of the withdrawn amount must be repaid each year starting in year 3 |
| Missed repayment consequence | The unpaid portion is added to your taxable income for that year |
| Repayment period | 15 years — after which any remaining balance is taxable income |
| First-time buyer requirement | Yes — same 4-year lookback as FHSA |
| Must be Canadian resident | Yes at time of withdrawal |
| Re-use after repayment | Once fully repaid, you can use HBP again if you qualify as a first-time buyer again |
HBP Repayment Example
A buyer withdraws $60,000 from their RRSP under the HBP in 2026. Repayment starts in 2028.
| Timeline | Action Required |
|---|---|
| 2026 | Withdraw $60,000 from RRSP — no tax owing |
| 2026–2027 | No repayment required |
| 2028 onwards (15 years) | Repay $4,000/year (1/15 × $60,000) to RRSP |
| If $4,000 not repaid in a year | That $4,000 is added to taxable income |
| 2042 (final year) | Final $4,000 repayment — HBP balance cleared |
The 90-day rule is critical: If a buyer wants to use the HBP and contributes to their RRSP shortly before purchase, those new contributions cannot be withdrawn under the HBP until 90 days have passed. This is a common trap for buyers who contribute just before closing.
Combining FHSA and HBP
The FHSA and HBP can be used simultaneously for the same qualifying home purchase. This is the most powerful strategy for first-time buyers in high-cost BC markets.
Maximum Combined Benefit — Couple Example
| Source | Person 1 | Person 2 | Combined |
|---|---|---|---|
| FHSA | $40,000 | $40,000 | $80,000 |
| RRSP HBP | $60,000 | $60,000 | $120,000 |
| Total | $100,000 | $100,000 | $200,000 |
Note: Both persons must individually qualify as first-time home buyers. RRSP balances depend on prior contribution history. This is the maximum theoretical benefit assuming all accounts are fully funded.
FHSA + HBP Strategy for BC Buyers
Open FHSA as early as possible
Even a $1 contribution in Year 1 opens the account and starts the carry-forward clock. The sooner you open it, the more room you accumulate.
Maximize FHSA contributions first
FHSA withdrawals never require repayment. Prioritize filling the FHSA before the RRSP for home purchase savings.
Use RRSP HBP for additional funds if needed
Once FHSA is maxed, consider RRSP contributions specifically for the HBP — but ensure funds sit for 90+ days before withdrawal.
Leverage FHSA tax deductions
FHSA contributions are tax-deductible. A BC buyer in the 40% marginal rate saves $3,200 in tax per $8,000 contributed. This refund can be re-invested.
If you don't buy, transfer FHSA to RRSP
FHSA funds can be transferred to an RRSP tax-free if you don't use them — so there's no downside to opening and contributing as early as possible.
BC-Specific Considerations
BC Property Transfer Tax (PTT) Exemption
First-time buyers in BC are exempt from PTT on purchases up to $500,000, with a partial exemption up to $525,000. This saves up to $8,000 — but is separate from federal programs. Some areas (rural BC) qualify for additional exemptions.
BC First Nations Property
The FHSA and HBP both require the property to be in Canada, but First Nations leasehold properties may have different rules. Buyers considering leasehold property should confirm eligibility with their financial institution before relying on these programs.
CMHC Mortgage Insurance and Down Payment
FHSA and HBP funds count toward the minimum down payment. For properties between $500K–$1M, a sliding scale applies (5% on first $500K, 10% on remainder). Above $1.5M, CMHC insurance is not available — buyers need a conventional 20% down.
Stress Test Impact
Using FHSA/HBP doesn't change the stress test rate (5.25% or contract rate +2%, whichever is higher). However, a larger down payment reduces the mortgage required and the qualifying pressure — so maximizing FHSA and HBP directly improves purchasing power.
30-Year Amortization for Insured Mortgages (2024)
As of August 2024, insured mortgages can qualify for 30-year amortizations for first-time buyers purchasing new builds. Combined with FHSA and HBP down payment funds, this extends buyer purchasing power.
BC Housing Programs
The BC HOME Partnership program (first-time buyer shared equity) ended in 2018 and is not available. Current BC programs include the BC Rental Support Program and secondary suite incentives — but no direct first-time buyer savings matching program comparable to the federal FHSA.
FHSA vs. HBP: Which to Prioritize?
| Scenario | FHSA Priority? | Reason |
|---|---|---|
| Planning to buy in 5+ years | FHSA first | More time to accumulate and get tax deductions. No repayment ever required on qualifying withdrawal. |
| Buying in 1–2 years | Both — FHSA first, then HBP | Open FHSA now to access room, use HBP for larger RRSP balances already accumulated. |
| Buying in <6 months | HBP may dominate | FHSA room may be limited; existing RRSP is likely larger. But open FHSA now for whatever room exists. |
| Already have a large RRSP | Both | Maximize FHSA ($40K) + withdraw from RRSP under HBP for largest combined down payment. |
| High income (high marginal rate) | FHSA first | Tax deduction is more valuable at higher marginal rates. A 50% taxpayer saves $4,000 per $8K contributed. |
| Low income right now, expecting higher income later | Defer FHSA deduction | FHSA contributions can be deducted in a future higher-income year — you don't have to claim the deduction the year you contribute. |
| First-time buyer disqualified (owned in last 4 years) | Neither — not eligible | Must wait until the 4-year lookback clears. Consider TFSA as alternative savings vehicle. |
Realtor Guide: How to Talk to First-Time Buyers About FHSA and HBP
You are not a financial advisor — and you shouldn't be giving tax advice. But you can and should understand these programs well enough to have an informed conversation and refer clients to the right professionals. Here is a buyer consultation framework:
Buyer Intake
- →Ask: 'Have you opened an FHSA yet?' — Many buyers haven't, and opening one now costs nothing.
- →Ask: 'Do you have RRSP savings you could use under the Home Buyers' Plan?'
- →Ask: 'Has your mortgage broker discussed both programs with you?'
Pre-Approval Stage
- →Confirm the buyer's mortgage broker is accounting for FHSA and HBP funds in the down payment.
- →Remind buyers of the 90-day RRSP rule — if they're planning a last-minute RRSP contribution for HBP, it won't work.
- →Confirm the buyer still qualifies as a first-time buyer (4-year lookback) before relying on either program.
During Offer Process
- →Ensure the offer completion date gives enough time for FHSA and HBP withdrawal processing (typically 2–4 weeks from financial institution).
- →Confirm with the buyer that their down payment source is documented for the lender.
- →Remind buyers that withdrawal documentation must be submitted to their financial institution before funds are released.
Referral Disclaimer
Always refer clients to a financial advisor or accountant for specific FHSA and HBP advice. Your role is to ensure they are aware of these programs and have connected with the right professionals before making an offer. Document this referral in your CRM notes — it demonstrates your duty of care.
FHSA Eligibility Edge Cases
Separated from a spouse who owns a home+
If you are legally separated and did not personally own and live in a qualifying home in the current or previous 4 years, you may qualify as a first-time buyer even if your spouse owns property — as long as you were not living in that property as a principal residence.
Previously owned a home more than 4 years ago+
The 4-year lookback means if you owned a home but sold it more than 4 calendar years ago and haven't owned one since, you may qualify again as a first-time buyer for both the FHSA and HBP.
Buying a home with a non-qualifying co-buyer+
You can still use FHSA and HBP funds even if your co-buyer does not qualify (e.g., they previously owned). Your eligibility is assessed individually.
New to Canada+
New permanent residents qualify as first-time buyers as long as they haven't owned a qualifying home they lived in within the 4-year lookback — which for recent immigrants may mean they automatically qualify since they didn't own Canadian property.
Buying a pre-sale condo+
You can use FHSA and HBP for a pre-sale purchase, but the FHSA withdrawal must be for a home you intend to occupy as a principal residence within 1 year of buying or building. For a pre-sale with a distant completion date, confirm timing with a financial advisor.
FAQ
Can you use both the FHSA and the RRSP Home Buyers' Plan together?+
Yes. The FHSA and HBP can be combined for the same qualifying home purchase. You can withdraw up to $40,000 tax-free from your FHSA and up to $60,000 from your RRSP (per person) for the same purchase. A couple could access up to $200,000 combined ($40K × 2 from FHSA + $60K × 2 from RRSP).
What is the FHSA contribution limit for 2026?+
The annual FHSA contribution limit is $8,000, with a lifetime limit of $40,000. Unused contribution room carries forward — but only for one year. For example, if you opened an FHSA in 2023 but only contributed $3,000 that year, you can contribute up to $13,000 in 2024 ($8,000 current year + $5,000 carried forward).
What is the RRSP Home Buyers' Plan limit for 2026?+
As of April 2024, the RRSP Home Buyers' Plan withdrawal limit increased from $35,000 to $60,000 per person. The funds must have been in the RRSP for at least 90 days before the withdrawal, and you must begin repaying the RRSP within 2 years of withdrawal — repaying 1/15th of the balance each year over 15 years.
Who qualifies as a first-time home buyer for the FHSA?+
To use the FHSA for a qualifying home purchase, you must be a first-time home buyer — meaning you have not lived in a home you owned (or that your spouse/common-law partner owned) at any time in the current year or in any of the preceding 4 calendar years. You must also be a Canadian resident, and the property must be acquired before December 31 of the year you turn 71.
Track your first-time buyer clients through the FHSA and HBP process
Magnate360 lets you log buyer notes, FHSA/HBP status, and subject condition deadlines — so every client conversation is documented and nothing falls through the cracks.
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This article is for informational purposes only and does not constitute tax, financial, or professional real estate advice. FHSA and HBP rules are set by the Canada Revenue Agency and may change. Always refer clients to a qualified financial advisor or accountant. View all articles