Tax-Free Down Payment Savings
FHSA + Home Buyers' Plan
Two of the most powerful tools for a first-time buyer are not loans or grants — they are tax breaks on your own savings. Together, the First Home Savings Account and the Home Buyers’ Plan let you put up to $100,000 toward a down payment with major tax advantages.
The First Home Savings Account (FHSA)
The FHSA is the newest and arguably best savings tool for first-time buyers, because it combines the two biggest advantages in Canadian investing. Like an RRSP, every dollar you contribute is tax-deductible, lowering the income tax you pay this year. Like a TFSA, when you withdraw the money to buy your first home, the withdrawal — including any investment growth — is completely tax-free.
You can contribute up to $8,000 per year to a lifetime maximum of $40,000. Unused room carries forward, and because qualifying first-home withdrawals never have to be repaid, the FHSA is effectively free down payment fuel for buyers who use it.
The Home Buyers’ Plan (HBP)
The Home Buyers’ Plan lets you borrow from your own RRSP to fund a down payment. You can withdraw up to $60,000 per person tax-free, which means a couple buying together can pull out as much as $120,000. The catch is that it is a loan to yourself: you repay the amount back into your RRSP over 15 years, with the first payment due a couple of years after your withdrawal.
Stacking them for maximum impact
The real magic happens when you combine the two. A single buyer can direct up to $100,000 toward a down payment ($40,000 FHSA + $60,000 HBP), and a couple can roughly double that. Layer in a municipal program like Welcome Home Niagara and the land transfer tax refund, and a first home in Niagara starts to look very achievable. See the full picture in our down payment programs overview, then browse Niagara homes under $500K to see what your savings can buy.
Frequently asked questions
What is the First Home Savings Account (FHSA)?
The FHSA is a registered account for first-time buyers that blends the best of an RRSP and a TFSA. Contributions are tax-deductible like an RRSP, and qualifying withdrawals to buy a first home — including any growth — come out completely tax-free like a TFSA. You can contribute up to $8,000 per year to a lifetime maximum of $40,000.
What is the Home Buyers' Plan (HBP)?
The HBP lets you withdraw money from your RRSP to put toward a first home without paying tax on the withdrawal. You then repay it back into your RRSP over 15 years. The withdrawal limit is $60,000 per person, so a couple buying together can access up to $120,000.
Can I use the FHSA and HBP together?
Yes. The two programs can be combined for the same home purchase. Between an FHSA (up to $40,000) and the HBP (up to $60,000), a single buyer can direct as much as $100,000 toward a down payment with significant tax advantages — and a couple can roughly double that.
Do I have to pay back the FHSA like the HBP?
No. Unlike the Home Buyers' Plan, qualifying FHSA withdrawals to buy your first home do not have to be repaid. The HBP withdrawal must be repaid to your RRSP over 15 years; the FHSA withdrawal is simply yours to keep.
When should I open an FHSA?
As early as possible. Opening the account starts your contribution room, and even a small balance lets you begin the tax-free growth clock. Many buyers open one well before they are ready to buy so the deduction and growth have time to add up.
This page is general information from Davids & DeLaat, REMAX Niagara Realty Ltd., and is not tax, legal or financial advice. The FHSA and Home Buyers’ Plan are federal programs administered by the Canada Revenue Agency; contribution limits and rules can change. Confirm current details with the CRA or a qualified financial professional before acting.
Talk to a local agent
Turn tax-free savings into a Niagara home
We will connect you with a mortgage professional to map out how your FHSA and RRSP can fund your down payment — then help you find the right home in Niagara.
Prefer to talk it through? Call the team or send a message.
Explore other buyer resources
Keep planning your first purchase with these related guides and live Niagara searches.
- Full Down Payment Programs Overview — compare every program
- DPAP Hamilton — for buyers considering Hamilton instead
- Ontario New-Home HST Rebate 2026 guide
- Get pre-approved for a mortgage — the required first step
- Niagara homes under $500K — matches the 5% down threshold
- Newly built Niagara homes — candidates for the HST rebate
- Set up an automated buying agent — instant new-listing alerts
- Buying with Davids & DeLaat — how our team makes it easy