Buying your first home in Canada comes with three significant government programs — and most buyers use only one or two. Understanding how to combine the First Home Savings Account, the RRSP Home Buyers' Plan, and CMHC's first-time buyer rules can add tens of thousands of dollars to your down payment.
Program 1: First Home Savings Account (FHSA)
The FHSA, launched in 2023, combines the best features of the TFSA and RRSP specifically for home purchases.
- Annual contribution limit: $8,000 per year
- Lifetime limit: $40,000
- Tax deduction: Contributions reduce your taxable income (like an RRSP)
- Tax-free withdrawal: When used to buy a qualifying first home — no repayment required
- Carry-forward: Unused room carries forward (max $16,000 in a single year)
The RRSP Home Buyers' Plan requires repayment over 15 years. The FHSA has no repayment requirement — withdrawals are simply tax-free. This makes the FHSA the superior tool for most first-time buyers who qualify.
Program 2: RRSP Home Buyers' Plan (HBP)
The HBP allows first-time buyers to withdraw up to $35,000 per person ($70,000 per couple) from their RRSP tax-free for a home purchase. Funds must be in your RRSP for at least 90 days before withdrawal.
Withdrawals must be repaid over 15 years. Missed repayments are added to your taxable income. Budget for approximately $2,333/year in repayments per $35,000 withdrawn.
Program 3: CMHC First-Time Buyer Rules 2026
| Purchase Price | Minimum Down Payment | Example |
|---|---|---|
| Up to $500,000 | 5% | $25,000 on $500K |
| $500,001 – $999,999 | 5% on first $500K + 10% on remainder | $50,000 on $750K |
| $1,000,000 – $1,499,999 | 10% (new as of Dec 2024) | $100,000 on $1M |
| $1,500,000+ | 20% minimum — no CMHC available | $300,000 on $1.5M |
Stacking All Three: Maximum Strategy for a Couple
| Source | Person A | Person B | Total |
|---|---|---|---|
| FHSA (max) | $40,000 | $40,000 | $80,000 |
| RRSP HBP (max) | $35,000 | $35,000 | $70,000 |
| Total | $150,000 | ||
On a $750,000 home, $150,000 represents a 20% down payment — eliminating CMHC insurance entirely and saving approximately $17,000 in premiums.
First-Time Home Buyers' Tax Credit
The Home Buyers' Tax Credit provides a $10,000 non-refundable federal tax credit in the year you buy your first home. At a 15% federal rate, this translates to a $1,500 reduction in federal tax payable. Claim it on line 31270 of your T1 return.
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