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The FHSA and the RRSP both give you a tax deduction when you put money in. They differ when you buy a home: from an FHSA the money can come out tax-free with nothing to repay, while an RRSP withdrawal of up to $60,000 under the Home Buyers’ Plan is a loan you pay back. The FHSA limit is $8,000 a year, up to $40,000, and the RRSP limit for 2026 is $33,810.
How do the two accounts compare?
| Item | FHSA | RRSP |
|---|---|---|
| Who can open it | Resident of Canada, 18 or older, first-time home buyer | Anyone with a SIN and earned income, up to the year they turn 71 |
| Yearly limit | $8,000, with unused room carried forward, up to $8,000 more | 18% of last year’s earned income, up to $33,810 for 2026, plus unused room |
| Lifetime limit | $40,000 | No lifetime cap, your room builds each year |
| Tax deduction | Yes, in the year you choose | Yes, in the year you choose |
| Withdrawal to buy a first home | Tax-free if it qualifies, nothing to repay | Home Buyers’ Plan: up to $60,000 without tax at withdrawal, repaid over time |
| Other withdrawals | Taxable | Taxable |
| Contribution deadline for a year | December 31 | 60 days after the year ends |
How much tax does each save?
The deduction works the same in both, so $8,000 saves the same tax in either one. In Ontario it saves the amounts below at three incomes, based on our RRSP calculator engine:
| Income | Tax saved by an $8,000 deduction |
|---|---|
| $50,000 | $1,674 |
| $80,000 | $2,522 |
| $120,000 | $3,011 |
The saving is not a flat share of the $8,000 because the deduction pushes part of your income into a lower bracket. The tax brackets page shows where those lines are.
Which one makes sense first?
If you plan to buy your first home in Canada, the FHSA has the cleaner exit, since the money comes out without tax or repayment. The RRSP still helps if you want more room, since the FHSA tops out at $40,000, or if you are unsure about buying. You can use both in the same year, and you can move money from an RRSP to an FHSA, although that transfer does not give you a new deduction.
What can go wrong?
- You have to be a first-time buyer. The CRA defines it by whether you lived in a home you owned in the current year or the four years before.
- An FHSA closes at the latest 15 years after you open it, at age 71, or the year after your first withdrawal, whichever comes first.
- Over-contributing to either account costs a penalty of 1% a month on the extra amount.
Use the FHSA calculator for your own numbers, the down payment calculator for what you need to save, and the first-time buyer benefits calculator for the other programs. The FHSA article and the Home Buyers’ Plan repayment schedule go deeper on each account, and year-end tax planning has the dates. If you are weighing the RRSP against a TFSA instead, try the TFSA vs RRSP calculator. This is general information and not advice, so check your own situation with the CRA. The CRA’s RRSPs and related plans page covers the RRSP side.
Where does this information come from?
The rules come from the Canada Revenue Agency FHSA page and its RRSP and Home Buyers’ Plan pages. The tax saved figures are calculated with our own engine. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
Can I use both an FHSA and an RRSP?
Yes, you can use both in the same year. You can also move money from an RRSP to an FHSA, although that transfer does not give you a new deduction.
What is the FHSA contribution limit?
The yearly limit is $8,000, with unused room carried forward, up to $8,000 more. The lifetime limit is $40,000.
Is an FHSA withdrawal taxable?
Not if it qualifies as a withdrawal to buy a first home: it comes out tax-free and there is nothing to repay. Other withdrawals are taxable.
How much can I take out of my RRSP to buy a first home?
Up to $60,000 under the Home Buyers' Plan, without tax at withdrawal. It is a loan from yourself, so you repay it over time.
Which is better for a first home, the FHSA or the RRSP?
If you plan to buy, the FHSA has the cleaner exit because the money comes out without tax or repayment. The RRSP helps if you want more room, since the FHSA tops out at $40,000, or if you are unsure about buying.
What happens if I put too much into an FHSA or RRSP?
Over-contributing to either account costs a penalty of 1% a month on the extra amount, so check your room on your notice of assessment or in your CRA account before you contribute.