Using RRSP Home Buyers Plan and FHSA together for one house purchase

You can pull money from both your RRSP and your FHSA for the same house purchase. The CRA doesn't make you choose one or the other - they're different programs with different rules, and using both maximizes how much you can withdraw tax-free.

Here's what you can take: up to $35,000 from your RRSP through the Home Buyers Plan, plus your entire FHSA balance (up to $40,000 if you've maxed it out). That's potentially $75,000 in tax-free withdrawals for your down payment.

The RRSP catch: you have to pay it back

The RRSP Home Buyers Plan lets you borrow from your future self. You withdraw up to $35,000 now, but you must pay it back over 15 years - starting the second year after you withdraw. Miss a payment and the CRA counts it as income, taxed at your marginal rate.

Your FHSA withdrawal is different. That money doesn't need to be repaid. Ever. It's a true tax-free withdrawal because you already got the tax deduction when you contributed.

The FHSA catch: stricter eligibility

The FHSA has tighter rules about what counts as a "first home." If you or your spouse owned a home in the four years before opening the FHSA, you can't use it. The RRSP Home Buyers Plan only looks back four years from the withdrawal date, not when you opened the account.

You also need to buy within 15 years of opening your FHSA, or it converts to an RRSP. The Home Buyers Plan has no such deadline.

Which to use first

Take from the FHSA first. You'll never have to repay it, and if you don't use it for a home purchase, you lose the tax-free withdrawal option when it converts to an RRSP at age 71.

Use the RRSP Home Buyers Plan to bridge the gap if your FHSA balance isn't enough for your down payment needs. At least you'll have 15 years to pay it back.

The math on a real purchase

Say you're buying a $500,000 home in Ontario and want to put down 20% ($100,000). You've got $30,000 in your FHSA and $40,000 in your RRSP.

You can withdraw the full $30,000 from your FHSA tax-free, then take $35,000 from your RRSP through the Home Buyers Plan. That's $65,000 toward your down payment. You'll need another $35,000 from other sources, but you've avoided tax on the biggest chunk.

The exact refund and repayment amounts depend on your income and province. TaxSplit.ca will show you what the RRSP withdrawal and repayment schedule looks like for your situation.

Timeline matters

You need to buy the home within one year of your RRSP withdrawal. The FHSA gives you more flexibility - you can hold the money until December 31 of the year after you withdraw it.

Both accounts require the same proof: a written agreement to buy or build a qualifying home, signed before October 1 of the year after withdrawal.

Use both if you have both. The programs complement each other: FHSA for the free money, RRSP Home Buyers Plan when you need more than the FHSA can provide.