First-Time Buyer: How Much Down Payment Can I Access?
Canada has programs that most first-time buyers don't know about. See how much you could put down — tax-free — using the FHSA and RRSP Home Buyers' Plan.
First-Time Buyer Down Payment Programs in Canada
Canada offers some of the best first-time buyer programs in the world — but most people don't know how to use them effectively. Between the First Home Savings Account (FHSA) and the RRSP Home Buyers' Plan (HBP), a single buyer can access up to $100,000 in tax-advantaged down payment funds. A couple buying together can access up to $200,000.
The First Home Savings Account (FHSA)
Introduced in 2023, the FHSA is the most powerful first-time buyer tool available. You can contribute up to $8,000 per year to a lifetime maximum of $40,000. Contributions are tax-deductible (like an RRSP), and withdrawals for a qualifying home purchase are completely tax-free (like a TFSA). Unlike the RRSP Home Buyers' Plan, there is no repayment requirement. The money is yours to use.
Unused contribution room carries forward — if you contribute $5,000 in one year, you can contribute up to $11,000 the next year ($8,000 + $3,000 carry-forward, capped at $8,000 carry-forward). There is no minimum waiting period — you can contribute and withdraw for a qualifying home purchase in the same year. But opening early lets you build contribution room and maximize tax-free growth, so the time to start is now — even if you only put in $1.
The RRSP Home Buyers' Plan (HBP)
The Home Buyers' Plan lets first-time buyers withdraw up to $60,000 from their RRSP tax-free to buy a qualifying home. If you're buying with a partner who is also a first-time buyer, each of you can withdraw up to $60,000 — that's $120,000 combined. The catch: you must repay the withdrawal to your RRSP over 15 years, starting the second year after the withdrawal. Miss a payment and that year's portion gets added to your taxable income.
Stacking Both Programs
You can use BOTH the FHSA and the HBP for the same home purchase. A single buyer with $40,000 in their FHSA and $60,000 in their RRSP could access $100,000 in tax-advantaged down payment funds. A couple where both partners maximize both programs could access $200,000. That's enough for a 20% down payment on a $1,000,000 home — with no CMHC insurance required.
The Tax Advantage Is Real
Both FHSA contributions and RRSP contributions are tax-deductible. If you're in a 30% marginal tax bracket and you contribute $40,000 to your FHSA over five years, you get approximately $12,000 back in tax refunds — money you can also put toward your down payment. Then when you withdraw the FHSA for your home, there's no tax on the withdrawal either. It's a double benefit that no other savings vehicle in Canada offers.
Who Qualifies as a First-Time Buyer?
In Canada, you're considered a first-time home buyer if you haven't owned a home that you lived in as your principal residence at any time in the current year or the preceding four calendar years. This means even if you owned a home years ago, you may qualify again. The definition applies separately to each partner, so one person in a couple can be a first-time buyer even if the other isn't.
The biggest mistake first-time buyers make: Not opening an FHSA early enough. There is no minimum waiting period before you can make a qualifying withdrawal. Even if you can only put in $100, open one today. The clock starts ticking. You can contribute the rest later. Talk to your bank or broker about opening an FHSA — it takes 15 minutes.
Frequently Asked Questions
Can I use both the FHSA and RRSP HBP for the same purchase?
Yes. You can stack both programs for a single home purchase. A single buyer can access up to $100,000 ($40,000 FHSA + $60,000 HBP). A couple can access up to $200,000. There's no restriction on using both simultaneously.
Do I have to repay the FHSA withdrawal?
No. Unlike the RRSP HBP, FHSA withdrawals for a qualifying home purchase do not need to be repaid. The money is yours free and clear. This is what makes the FHSA the more powerful program.
How do I repay the RRSP Home Buyers' Plan?
You have 15 years to repay, starting the second year after your withdrawal. Each year, you must repay at least 1/15 of the total amount. If you withdrew $60,000, that's $4,000 per year. If you miss a payment, that year's portion is added to your taxable income.
Can I use a family gift for my down payment?
Yes. Most lenders accept gifted funds for down payment, but they typically require a signed gift letter confirming the money is a gift and not a loan. The gift usually must come from an immediate family member (parent, grandparent, sibling). Your mortgage broker can provide the gift letter template.
I owned a home years ago — do I still qualify as a first-time buyer?
Possibly. If you haven't owned a home that was your principal residence in the current year or the previous four calendar years, you qualify as a first-time buyer again for both the FHSA and the HBP. This is a common situation after divorce or after selling and renting for several years.
Shawn specializes in helping first-time buyers navigate the programs, the paperwork, and the process. One call and you'll know exactly where you stand — what you qualify for, which programs to use, and what your real monthly cost would be.
📞 Call Shawn — 403-703-6847Serving Calgary, Okotoks, High River & Southern Alberta
Your Local Mortgage Professionals