Question 1

How is the HBP different from the FHSA?

Accepted Answer

The Home Buyers' Plan (HBP) lets you withdraw up to $60,000 from an existing RRSP, but the money is a loan from yourself: you must repay it over 15 years starting the second year after withdrawal. Missed repayments are added to your taxable income for that year. The First Home Savings Account (FHSA) is a separate registered account with a $40,000 lifetime contribution limit; qualifying withdrawals are tax-free and never need to be repaid. You can use both for the same home purchase, often FHSA first and HBP to top up beyond $40,000.

Question 2

What happens if I miss an HBP repayment?

Accepted Answer

Each year, the CRA sends you an HBP statement showing the minimum required repayment. To repay, you make an RRSP contribution and then designate it as an HBP repayment on Schedule 7 of your tax return. If you do not designate enough, the shortfall is added to your taxable income on line 12900 for that year. You still owe the rest of the balance and it must be repaid in future years. At a 30% marginal rate, missing a $4,000 repayment costs roughly $1,200 in tax, which is usually not catastrophic but adds up over time.

Question 3

Who qualifies as a first-time home buyer for the HBP?

Accepted Answer

You qualify if you have not owned a home that you (or your spouse or common-law partner) occupied as your principal place of residence at any time in the current calendar year or the four preceding calendar years. The home must be located in Canada and you must intend to occupy it as your principal place of residence within one year of buying or building it. People with disabilities and those buying for a related person with a disability are exempt from the first-time buyer rule.

Question 4

Can I combine HBP and FHSA for the same home?

Accepted Answer

Yes. Since 2023, you can use both programs for the same qualifying home purchase. The strategic order is usually FHSA first (since the withdrawal is fully tax-free and never has to be repaid), then HBP to top up. A first-time buyer with maxed out FHSA ($40,000) plus full HBP ($60,000) can withdraw up to $100,000 from registered accounts toward a down payment, completely tax-free at the time of withdrawal.

Question 5

When does the 15-year repayment clock start?

Accepted Answer

The clock starts in the second calendar year after the withdrawal. For example, if you withdraw in 2026, your first repayment is due by the deadline for your 2027 tax return contributions (60 days after December 31, 2027, so around early March 2028). You have 15 annual repayments to make. Each repayment equals 1/15 of the original withdrawal, rounded to whole dollars, with a small adjustment in the final year.

Question 6

How much can spouses withdraw combined?

Accepted Answer

Each spouse can withdraw up to $60,000 from their own RRSP, for a combined total of $120,000 toward the same first home. Each repays their own withdrawal on their own tax return over 15 years. Spouses can also each open a FHSA and contribute up to $40,000 each, adding up to another $80,000 combined for a potential total of $200,000 in tax-advantaged down payment funds.

Question 7

Can I still contribute to my RRSP while repaying the HBP?

Accepted Answer

Yes. The HBP repayment is separate from a new RRSP contribution. The way it works on your tax return: you make an RRSP contribution, then split it on Schedule 7 between (a) an HBP repayment (no deduction, just reduces your balance) and (b) a regular contribution (tax-deductible). If you contribute more than the minimum required HBP repayment, the excess is treated as a regular deductible contribution. This means you can both repay your HBP and build new retirement savings in the same year.

Question 8

What if I sell the home before paying off the HBP?

Accepted Answer

You can sell the home at any time and still owe the same HBP repayment schedule. The HBP loan is tied to you personally, not to the home. If you sell and rent or buy a new home, you continue making HBP repayments on your tax return as before. You do not have to pay off the remaining balance in a lump sum on sale.

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