Paying for a First Toronto Home with the FHSA and the RRSP Home Buyers' Plan

The short answer

The FHSA and Home Buyers’ Plan are the two federal programs that let a first-time buyer in Toronto use tax-sheltered savings for a home. The First Home Savings Account (FHSA) is a registered account designed for a first home. The Home Buyers’ Plan (HBP) lets you take money out of your own registered retirement savings plans (RRSPs) and pay it back over 15 years.

Canada Revenue Agency (CRA) says you can use both for the same qualifying home, as long as you meet every condition at the time of each withdrawal. The FHSA lifetime limit is $40,000. The HBP limit is currently $60,000.

The Toronto wrinkle is that “first-time buyer” means one thing to CRA and something stricter to the Province of Ontario and the City of Toronto, whose land transfer tax refund and rebate can save a first-time buyer up to $8,475. This post sets out the rules as CRA, Ontario and the City publish them. It is not tax advice, so confirm your own case with CRA or an accountant before you open an account or withdraw.

The FHSA in brief

Opening an account. CRA’s conditions are that you are at least 18 (19 where that is the legal age to enter a contract), no older than 71 at December 31 of the year you open it, a resident of Canada and a first-time home buyer. For opening, that means you did not live in a home you owned or jointly owned as your principal residence in the current calendar year or the previous 4 calendar years. The same test applies to a home your spouse or common-law partner owned, if you have one.

Contributing. Your participation room is $8,000 in the year you open your first FHSA. Unused room carries forward, capped at $8,000, so CRA’s example of a holder who contributed nothing in the first year shows $16,000 of room in the second. The lifetime FHSA limit is $40,000. CRA says contributions are generally deductible on your return for that year or a future year. Transfers from your RRSPs into your FHSA are not deductible.

Withdrawing. A qualifying withdrawal is tax-free and you do not repay it. CRA’s six conditions are:

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

Closing the account. The participation period ends on December 31 of the year of the earliest of three events: the 15th anniversary of opening your first FHSA, turning 71 or the year after your first qualifying withdrawal. CRA says anything left can move to an RRSP or RRIF on a tax-deferred basis. Otherwise it is taxable.

The Home Buyers’ Plan in brief

CRA states the HBP withdrawal limit is currently $60,000 and that your RRSP issuer will not withhold tax on withdrawals up to that amount. You can only withdraw from RRSPs in your own name. Withdrawals can be made in the same calendar year as your first withdrawal and in January of the next year. You request each one with Form T1036.

To qualify you need a written agreement to buy or build a qualifying home. CRA is explicit that a pre-approved mortgage does not count. The home must be acquired or built before October 1 of the year after your first withdrawal and you must intend to live in it within one year.

For the HBP, you are a first-time home buyer if, in the current year before the withdrawal (except the 30 days immediately before it) or in the four preceding calendar years, you did not live in a home that you or your current spouse or common-law partner owned or jointly owned as your principal residence.

On repayment, CRA says temporary relief now covers anyone whose first HBP withdrawal falls between January 1, 2026 and December 31, 2028. For them the 15 year repayment period starts in the fifth year after the withdrawal year, so a first withdrawal in 2026 means repayments start in 2031. One timing trap: an RRSP contribution made in the 89 days before an HBP withdrawal may not be deductible.

Three first-time buyer tests, not one

This is the part that most often surprises Toronto buyers. A Toronto purchase involves up to three different definitions.

Program	Who counts as a first-time buyer	Maximum benefit
FHSA withdrawal	Did not live in a home you owned or jointly owned as your principal residence in the current year (except the last 30 days) or the previous 4 years	$40,000 lifetime contribution limit, never repaid
Home Buyers’ Plan	Same look-back, but a home owned by your current spouse or common-law partner also counts	$60,000, repaid over 15 years
Ontario land transfer tax refund	Has never owned a home or an interest in a home anywhere in the world; a spouse cannot have owned one while your spouse	Up to $4,000
City of Toronto MLTT rebate	Has never owned a home or any ownership interest in a home anywhere in the world; the same spouse rule	Up to $4,475

The Ontario and Toronto programs also require you to be a Canadian citizen or permanent resident, at least 18 and to occupy the home as your principal residence within nine months. The practical result: someone who sold a condo six years ago may be a first-time buyer for the FHSA and HBP, yet pay both Toronto land transfer taxes in full. Our Toronto land transfer tax calculator shows both taxes with and without the first-time relief.

How far the two programs go at Toronto prices

This is an illustration with round numbers, not a real client. TRREB reports a median condo apartment price of $550,000 in the City of Toronto for August 2026. The minimum down payment on that price is $30,000: 5% of the first $500,000 plus 10% of the $50,000 above it.

For a buyer who meets every test, the land transfer taxes on $550,000 would be $7,475 provincial plus $7,475 municipal. That is $14,950 in total. After the $4,000 Ontario refund and the $4,475 Toronto rebate, that falls to $6,475.

Illustrative cash need on a $550,000 condo	Amount
Minimum down payment	$30,000
Land transfer taxes after first-time relief	$6,475
Total before legal fees and adjustments	$36,475

A single buyer with the full $40,000 FHSA limit could cover that total from the FHSA alone, with no repayment. A buyer who wants a larger down payment, perhaps to lower the stress test payment, could add HBP money on top. For example, adding $30,000 from the HBP would create a minimum repayment of $2,000 a year over 15 years.

The picture changes quickly with price. At the August 2026 median detached price of $1,170,000, the minimum down payment is $92,000. Two buyers each using their own FHSA at the $40,000 limit would reach $80,000. HBP withdrawals from their own RRSPs could close the gap. Our post on the mortgage stress test at Toronto prices shows how a larger down payment changes the qualifying payment.

Toronto home types that qualify

CRA’s list of qualifying homes is broad and covers most of what first-time buyers look at in the city: single-family homes, semi-detached homes, townhouses, condominium units and apartments in duplexes, triplexes, fourplexes or apartment buildings. It must be located in Canada and can be existing or under construction.

Housing co-operatives need a closer look. CRA includes a co-op share that entitles you to own and gives you an equity interest in a unit. A share that gives you only a right to tenancy does not qualify.

If you are buying a condo, read our guide to the condo status certificate in Toronto before your offer goes firm.

Timing withdrawals around a Toronto closing

• Sign first, withdraw second. Both programs need a written agreement before you withdraw, so any deposit due on acceptance has to come from other savings.
• Watch the 30 day FHSA rule. The FHSA withdrawal cannot come more than 30 days after you acquire the home. Leave time for your financial institution to process the forms before your closing date.
• Pre-construction condos. Both programs set an October 1 deadline in the year after the withdrawal. A condo with a long or uncertain occupancy date can miss it, so check before withdrawing.
• Claim the land transfer relief at registration. The Ontario refund can be claimed through the electronic land transfer tax statements when your lawyer registers the transfer. The City says its rebate can be claimed at registration or applied for within 18 months after the transfer.

What to do next

1. Check your FHSA room and any HBP balance in your CRA account.
2. Work out which first-time buyer tests you meet: FHSA, HBP, Ontario refund and Toronto rebate.
3. Ask your bank how long FHSA and HBP withdrawals take and which forms it needs.
4. Get a pre-approval, remembering it is not a written agreement.
5. Line up your withdrawal dates with your deposit, closing date and the 30 day FHSA window.

Our first time home buyer guide for Toronto explains how we plan a first purchase and the buyers page covers how we work. When you know your numbers, contact us and we will talk through your timeline.