Using the FHSA and the Home Buyers' Plan for Your First Markham Home

The short answer

If you are buying your first home in Markham, the FHSA and Home Buyers’ Plan are the two federal programs that let you put tax-sheltered savings toward the purchase. The First Home Savings Account (FHSA) is a registered account built for a first home. The Home Buyers’ Plan (HBP) lets you borrow from your own registered retirement savings plans (RRSPs) and pay yourself back over time.

Canada Revenue Agency (CRA) confirms that you can use both for the same qualifying home, as long as you meet all of the conditions at the time of each withdrawal. The FHSA has a $40,000 lifetime limit and you never repay a qualifying withdrawal. The HBP limit is currently $60,000 and it has to be repaid.

This post explains how each program works, how they differ and where the timing touches a Markham purchase. It explains the rules as CRA publishes them. It is not tax advice, so confirm your own situation with CRA or an accountant before you open an account or withdraw anything.

How the First Home Savings Account works

Who can open one

To open an FHSA you must meet all of these conditions when you open the account, according to CRA:

• You are 18 years of age or older (19 where that is the legal age to enter a contract in your province or territory).
• You are 71 years or younger as of December 31 of the year you open it.
• You are a resident of Canada.
• You are a first-time home buyer for the purpose of opening an FHSA.

For opening an account, CRA considers you a first-time home buyer if you did not live in a qualifying home that you owned or jointly owned as your principal place of residence in the current calendar year or the previous 4 calendar years. The same test applies to a home owned by your spouse or common-law partner at the time you open the account.

How much you can contribute

Your FHSA participation room in the year you open your first FHSA is $8,000. That room covers your contributions and any transfers from your RRSPs combined and it applies across all of your FHSAs together, not to each account separately.

If you do not use all of your room, some of it carries forward, but CRA caps the participation room carryforward at $8,000. CRA’s own example shows someone who opened her first FHSA in 2026 and made no contributions or transfers that year receiving a 2027 participation room of $16,000. The lifetime FHSA limit is $40,000.

Contributions are generally deductible on your income tax and benefit return. Transfers from your RRSPs into your FHSA are not deductible. Investment income earned inside the account does not count against your participation room.

What counts as a qualifying withdrawal

A qualifying withdrawal comes out of the FHSA without being added to your income and you do not repay it. CRA lists these conditions:

1. You are a first-time home buyer for the purpose of making a withdrawal.
2. You have a written agreement to buy or build a qualifying home, with an acquisition or construction completion date before October 1 of the year following the withdrawal.
3. You did not acquire the home more than 30 days before making the withdrawal.
4. You are a resident of Canada from your first qualifying withdrawal until you acquire the home.
5. You occupy or intend to occupy the home as your principal place of residence within one year after buying or building it.
6. You fill out Form RC725 and give it to your FHSA issuer.

The first-time buyer test for a withdrawal is different from the test for opening the account. For a withdrawal, CRA looks only at a home that you owned or jointly owned. It also ignores the 30 days immediately before the withdrawal. If a condition is not met, the withdrawal is treated as taxable income.

When the account has to close

Your maximum participation period starts when you open your first FHSA. It ends on December 31 of the year in which the earliest of these happens: the 15th anniversary of opening your first FHSA, you turn 71 or the year following your first qualifying withdrawal. CRA advises closing your FHSAs before that period ends to avoid unintended tax consequences.

How the RRSP Home Buyers’ Plan works

The withdrawal limit and when it changed

The HBP lets you withdraw from your RRSPs to buy or build a qualifying home. CRA states that the limit is currently $60,000. CRA’s notice for the 2025 tax-filing season explains that it increased from $35,000 to $60,000 for withdrawals made after April 16, 2024. You can only withdraw from RRSPs where you are the annuitant and CRA notes that locked-in and group RRSPs normally do not allow it.

Your RRSP issuer will not withhold tax on HBP withdrawals of $60,000 or less. You can make several withdrawals, but only in the same calendar year as your first withdrawal and in January of the following year.

Who qualifies

The HBP conditions include having a written agreement to buy or build a qualifying home, being a resident of Canada and intending to occupy the home as your principal place of residence within one year. CRA notes that a pre-approved mortgage is not a written agreement.

For the HBP, you are a first-time home buyer if you did not live, in the current calendar year before the withdrawal (except the 30 days immediately before it) or in the preceding four calendar years, in a qualifying home you owned or jointly owned as your principal place of residence. Unlike the FHSA withdrawal test, the HBP test also counts a home owned or jointly owned by your current spouse or common-law partner. CRA sets out exceptions for a specified disabled person and for some people who have separated, so check the CRA page if either applies.

The home has to be bought or built before October 1 of the year after the year of your first withdrawal.

One more rule to plan around: if you contribute to your RRSP in the 89 days before an HBP withdrawal, that contribution may not be deductible.

Repayment and the temporary relief

You have up to 15 years to repay what you withdrew, back into your RRSPs. Under the older rules, repayment started in the second year after the year of your first withdrawal.

CRA’s HBP page says temporary repayment relief has been extended for people making a first HBP withdrawal between January 1, 2026 and December 31, 2028. The Department of Finance announced that the legislation for this extension, Bill C-30, received Royal Assent on June 19, 2026. For them, the 15-year repayment period starts in the fifth year following the year of the first withdrawal. CRA’s example: a first withdrawal in 2026 means a first repayment year of 2031. The earlier relief, from Budget 2024, covers first withdrawals between January 1, 2022 and December 31, 2025. Some older CRA pages still describe only the earlier relief, so check the main HBP page for the current rule.

If you repay less than the minimum required for a year, the shortfall is added to your income as RRSP income. CRA also states that you cannot repay HBP withdrawals into an FHSA.

FHSA vs Home Buyers’ Plan compared

	First Home Savings Account	Home Buyers’ Plan
Where the money comes from	Your FHSAs	Your own RRSPs
Limit	$8,000 room in the first year, carryforward up to $8,000, $40,000 lifetime	Currently $60,000
Repayment	None for a qualifying withdrawal	Up to 15 years
When repayment starts	Not applicable	Fifth year after the year of first withdrawal, for first withdrawals from 2026 to 2028
First-time buyer test at withdrawal	Home you owned or jointly owned, current year and previous 4 years	Home you or your current spouse or common-law partner owned or jointly owned, current year and preceding 4 years
Written agreement needed	Yes	Yes
Home acquired by	Before October 1 of the year following the withdrawal	Before October 1 of the year after the first withdrawal
Must live in the home	Within one year of buying or building	Within one year of buying or building
Form	RC725	T1036

Can you use both for the same home?

Yes. CRA states this directly on both the FHSA withdrawal page and the HBP page. You need to meet each program’s conditions at the time of each withdrawal. The first-time buyer tests are not identical, so someone can qualify for one and not the other.

Here is an illustrative example with round numbers, not a real client. A single first-time buyer who has contributed the $40,000 FHSA lifetime limit and has $60,000 in their RRSPs could, if they meet every condition, draw on up to $100,000 plus any investment growth inside the FHSA. The FHSA portion is not repaid. The $60,000 HBP portion would have a minimum repayment of $4,000 a year over 15 years ($60,000 divided by 15), with the first repayment year set by the rules above.

Couples should look at each person separately. CRA says two people buying together can each make a qualifying withdrawal from their own FHSAs if both meet the conditions. HBP withdrawals can only come from your own RRSPs.

How this fits a Markham purchase

Both programs accept the housing types most first-time buyers look at in Markham. CRA’s list of qualifying homes includes condominium units, townhouses, semi-detached homes and single-family homes located in Canada.

The rules that matter most in practice are about timing:

• A signed agreement comes first. Both programs need a written agreement to buy or build before you withdraw. Plan for any money you need before that point to come from other savings.
• Leave time before closing. Withdrawals go through your financial institution and need the right form, so talk to them well before your closing date. For the FHSA, you also cannot have acquired the home more than 30 days before the withdrawal.
• Pre-construction needs extra care. Both programs set an October 1 deadline in the year after the withdrawal. For the HBP, CRA treats a condo purchase as acquired on the day you are entitled to immediate vacant possession. If you are buying new construction with a long or uncertain occupancy date, check the deadlines before you withdraw.
• Budget beyond the down payment. Land transfer tax, legal fees and adjustments are due on closing too. Our guides to land transfer tax in Markham and closing costs when buying a home in Markham walk through them.

If you are buying a condo, read our guide to the condo status certificate in Markham before you firm up an offer.

What to do next

1. Log in to your CRA account to check your FHSA participation room and any HBP balance.
2. Confirm with CRA or an accountant that you meet the first-time buyer test for each program, especially if you or your partner has owned a home in the last few years.
3. Ask your financial institution how long an FHSA or HBP withdrawal takes to process and which forms it needs.
4. Get your mortgage pre-approval, knowing it does not count as a written agreement.
5. Line up the timing of your withdrawals with your agreement and closing date.

Our guide for first time home buyers in Markham explains how we build a realistic budget and search plan in Markham and our buyer page covers how we make offers. When you are ready, contact us and we will talk through your timeline.