Scraping together a competitive down payment in 2025 often feels like a marathon. But two revamped federal programs-the First Home Savings Account (FHSA) and the beefed-up Home Buyers' Plan (HBP)-let first-time buyers tag-team their tax shelters, potentially unlocking six figures of cash without triggering a tax bill. Below, we break down the rules, the math, and the smart ways to combine them so you can hit the starting line of your home search with real momentum.
Think of the FHSA as the love-child of an RRSP and a TFSA: contributions are tax-deductible now, and qualified withdrawals are tax-free later. You can deposit up to $8,000 per year until you hit the $40,000 lifetime ceiling, and any unused annual room rolls forward, so opening an account early maximizes flexibility (Source: CRA-First Home Savings Account, updated April 2025).
Contribution receipts lower your taxable income like an RRSP, and your growth compounds tax-free. You have a 15-year "participation period" to buy or build a qualifying first home. If you change your mind, you can roll the balance into an RRSP without affecting your RRSP contribution room, keeping the tax deferral intact.
The 2024 federal budget boosted the RRSP withdrawal limit under the Home Buyers' Plan to $60,000, reflecting bigger down-payments in today's market (Source: Budget 2024, Chapter 1: More Affordable Homes). This change applies to withdrawals made on or after April 16, 2024 and extends to buyers with disabilities purchasing an accessible home.
You still need to repay the borrowed amount to your RRSP over 15 years or include any missed instalments in your taxable income. But the higher ceiling means a couple can now pull up to $120,000-and combine that with two FHSAs for a potential $200k+ down payment.
Because Ottawa treats the FHSA and HBP as separate vehicles, you can tap both for the same purchase. A buyer who maxes their FHSA ($40k) and RRSP withdrawal ($60k) walks into their offer negotiations with $100,000-before even adding partner contributions or cash savings (Source: CRA-HBP Overview, updated January 2025).
That larger down payment can:
CMHC's 2025 Housing Market Outlook projects modest national price growth of 2–3 % through 2026, citing improved affordability as rates drift lower but inventory stays tight (Source: CMHC Housing Market Outlook, February 5 2025). Against that backdrop, first-timers with bigger liquid down payments will stand out to sellers and lenders alike.
No. You must not have lived in a home you or your spouse owned in the current or previous four calendar years to qualify (Source: CRA FHSA eligibility).
Good news-they don't. FHSA deposits sit on top of your RRSP and TFSA limits, giving you fresh tax-deductible space.
The schedule hasn't changed: the second calendar year after the year you withdraw. If you take funds in 2025, repayments begin in 2027.
Absolutely. Lenders will simply verify each source. A larger equity stake can even help you qualify under the mortgage stress test.
You must close the FHSA by the end of that year-rolling the balance into an RRSP or withdrawing it as taxable income. Rolling keeps the tax shelter intact.
Leveraging the FHSA and the enhanced HBP is one of the fastest ways to turn "someday" into "sold." If you're ready to map out a contribution strategy, or need help proving the down-payment source to a lender, our team is a click away.