The Ultimate CRA Playbook: RRSP, TFSA, FHSA, RESP, HBP and More.
- Mathieu Mireault-Beaulieu
- Oct 9
- 20 min read
Updated: Oct 14
Updated on 2025-10-14
If you ended up here, it’s probably because you’re trying to make sense of the alphabet soup of tax tools CRA throws at you. The problem? It’s like trying to do algebra in your head while eating a delicious donut — your brain doesn’t know what to focus on.
That’s why we broke down each tool — RRSP, TFSA, FHSA, RESP and HBP — with their advantages and limits, so you can stop guessing and start planning your financial future like a pro.
Quick Access:
For the picky eaters, jump straight to the section you want:
(Or just scroll — we’ll serve you the whole meal.)
Let’s take our first bite.
First Things First – Your CRA Dashboard
Before we dive into the alphabet soup, here’s your first power move: check your CRA Notice of Assessment (NOA) or log into CRA My Account.
This is your personal tax dashboard. It tells you:
Your exact RRSP contribution limit
Unused contribution room carried forward
Your current TFSA room
CRA messages and warnings you might miss
If you don’t look at this first, you’re guessing. Guess wrong, and CRA can hit you with 1% per month penalties on TFSA over-contributions or RRSP excess contributions.
Want to dig deeper? Check our blog about your NOA.
RRSP
The Playbook — RRSP in 60 Seconds
Deductible contributions lower your taxable income.
Tax-deferred growth until withdrawal.
Contribution room: 18% of earned income (up to $31,650 for 2024) + carry-forward + pension adjustments.
Deadline: Contributions in the first 60 days of the new year count for the previous tax year.
Penalty: Over $2,000 buffer = 1% per month penalty until fixed.
What Is a RRSP?
You’ve heard this one thrown around like a boomerang by employers, financial planners, tax pros and even your neighbour Doug. Also it does not stand for Richest Risotto Soup Portion. The Registered Retirement Savings Plan (RRSP) is a powerful way to plan for your future, but it can hurt you if you don’t follow the rules.
When you contribute to your RRSP, you defer tax on that money until later.
Example:
You earn $60,000 and contribute $5,000 to your RRSP in 2025.
CRA will tax you as if you made $55,000.
At a 25% marginal tax rate, that saves you about $1,250 in tax right now — money back in your pocket.
That $5,000 grows tax-sheltered until retirement.
When you retire, you can:
Withdraw lump sums (taxable income that year), or
Convert to a RRIF (Registered Retirement Income Fund) for steady withdrawals.
💡 Think of your RRSP as your retirement savings account — where you build your nest egg — and your RRIF as your retirement chequing account — where you draw a predictable income stream every year after you stop working. RRIFs are designed to pay you annually until the account runs out or you pass away.
How Much You Can Contribute
Doug isn’t totally wrong saying “18% of income,” but here’s the actual formula:
Unused RRSP room from last year
➕
Lesser of:
18% of earned income from last year
Annual RRSP dollar limit (2024: $31,650, roughly $175,333 salary cap)
➕
Pension adjustments
➕
PAR (pension adjustment reversal)
➖
PSPA (past service pension adjustment)
=
Your RRSP contribution room
Yes, it looks complicated — but don’t stress. CRA does this math for you every year and shows the result on your Notice of Assessment (NOA).
Key Dates & The “First 60 Days” Rule
Grab a coffee — this part bends people’s brains every year.
RRSP contributions don’t follow the calendar year. Instead, contributions made in the first 60 days of the new year count for the previous tax year.
Example:
$1,000 contributed between Mar 1–Dec 31, 2024
$200 contributed between Jan 1–Mar 1, 2025
= $1,200 total applied to 2024 taxes
This is CRA’s way of letting you “catch up” after you see your tax situation. Imagine you filed your 2024 taxes in early February and learned you’d owe $1,500. You can still make an RRSP contribution in February, deduct it against 2024, and shrink that balance — sometimes turning an amount owing into a refund.
💡 Our service: Contact us before March 1 and we’ll calculate exactly how much RRSP you should contribute to hit your sweet spot (avoid overpaying but still save the max).
The Limits & Penalties
RRSPs have teeth if you break the rules:
You cannot exceed your limit.
Contributions allowed until Dec 31 of the year you turn 71.
Over-contribution penalty: 1% per month on the amount over your limit + $2,000 buffer.
Example:
Limit = $10,000
You contributed $13,000 → $1,000 is taxable excess.
If you take 6 months to fix it → CRA charges $60 in penalty tax (1% × 6 months).
To fix an over-contribution, you must file T1-OVP (Individual Tax Return for RRSP Excess Contributions) — basically a special form where you report the excess, pay the penalty, and reset your RRSP room.
Waiver or Cancellation of Excess Tax
CRA may waive the penalty if:
It was a reasonable error, and
You’ve taken steps to fix it.
If you need help filing T1-OVP or requesting a waiver — we handle this. Reach out.
TFSA
The Playbook — TFSA in 60 Seconds
Tax-free growth: All interest, dividends, and capital gains stay tax-free forever.
Flexible use: Savings account, investments, or both — your choice.
Contribution room: Builds every year if you’re 18+, a Canadian tax resident, and have a valid SIN.
Withdrawals: Room from withdrawals only comes back January 1 of the next year.
Penalty: Over-contribution or contributing as a non-resident = 1% per month tax until fixed.
What is a TFSA?
I'm sure you have heard of this one quite a few like the RRSP. If you thought it was The Fierce Soup Association, yeah, but no. The Tax Free Savings Account (TFSA) is a wonderful tool to invest your money tax free as long you follow the rules.
How TFSA Room Grows
CRA sets the annual room based on inflation (rounded to the nearest $500). If you don’t use it, it carries forward forever.
TFSA Annual Limit Table
Year | Limit |
2009–2012 | $5,000 |
2013–2014 | $5,500 |
2015 | $10,000 |
2016–2018 | $5,500 |
2019–2022 | $6,000 |
2023 | $6,500 |
2024–2025 | $7,000 |
Worked Example – TFSA Room in Action
Let’s say you turned 18 in 2009. By 2025, you have $102,000 of total TFSA room.
You contribute $75,000 → you now have $27,000 room left.
You withdraw $10,000 mid-year → your available room stays $27,000 until January 1 next year (withdrawals don’t free room right away).
You contribute another $25,000 later in the year → now you only have $2,000 room left for the rest of the year.
On January 1 of the next year, CRA updates your room:
Adds $7,000 new room (2026 limit)
Adds back your $10,000 withdrawal
Adds your unused $2,000 room from last year→ Your new total room becomes $19,000 for 2026.
This example shows why knowing your numbers is critical: if you tried to put that $10,000 back before January 1, you’d have over-contributed and been taxed 1% per month until you fixed it.
Growth Does NOT Eat Your Contribution Room
Here’s the best part — your TFSA room is based on what you put in, not how much your investments grow.
Example:
You contribute $50,000 and your TFSA grows by $10,000 during the year.
CRA still considers your contribution to be $50,000.
Next year, CRA adds $7,000 of new room → your total limit becomes $57,000.
Even though your TFSA is now worth $60,000, you can still put in the full $7,000.
Growth never reduces your future room — which is why TFSAs are such a powerful long-term wealth tool.
Timing Trap
Example: You have $20K in TFSA, max room $25K. You withdraw $5K in June. You might think you can now put $10K back (5K room + 5K withdrawal). Wrong. That $5K withdrawal doesn’t create new room until January 1 next year. Over-contribute and CRA will hit you with 1% per month.
CRA’s Alphabet Soup of Penalties
Over-contributions: 1% per month on the excess until withdrawn.
Non-resident contributions: Same 1%/month — and no new room accrues while you’re a non-resident.
Non-qualified or prohibited investments: Can trigger tax of 50–100% of the amount involved.
Advantages: CRA taxes “advantages” — swaps, sweetheart deals, or schemes that create unfair gains — at 100%.
Qualified vs. Prohibited Investments
✅ Allowed: GICs, stocks, ETFs, bonds, mutual funds.🚫 Risky / prohibited:
Shares of a company you or a related person control
Loans you made to yourself or a family member
Creative swap transactions or derivatives designed to avoid tax
If it sounds too clever, CRA probably considers it a prohibited advantage — and they can tax the entire amount.
TFSA Bonus: No Impact on Benefits
TFSA withdrawals don’t count as income. They won’t reduce your CCB, OAS, GIS, EI, or other federal benefits. Compare that to RRSP withdrawals, which can claw back benefits.
Waivers & Fixes
Mistakes happen. CRA may cancel penalties if it was a reasonable error and you acted quickly to fix it. If you wait years, your odds aren’t great.
Fun fact: I once had CRA waive my own TFSA penalty — because I fixed it immediately and showed good faith.
Not sure if you’re over the limit? We can check your CRA numbers before the 1% monthly penalty kicks in.
FHSA
The Playbook — FHSA in 60 Seconds
Double benefit: Get a tax deduction now + withdraw tax-free for your first home.
Annual Room: $8,000 per year, max $40,000 lifetime.
Eligibility: Must be 18+, a Canadian resident, and a first-time homebuyer (no home owned by you or your spouse in last 4 years).
Transfers: RRSP → FHSA allowed (no new deduction); FHSA → RRSP/RRIF tax-free if you change plans.
Deadlines: Account can stay open 15 years or until you turn 71.
Penalty: 1% per month on over-contributions — same as TFSA.
What is a FHSA?
If you haven’t heard of this one yet, don’t worry — you’re not living under a rock. And I am sorry to disappoint to say that it does not stand for Fennel Enhanced Soup Aroma. The First Home Saving Account (FHSA) is brand-new: launched in 2023 to help first-time buyers actually get into the market despite today’s prices.
The FHSA is like if RRSP and TFSA had a baby:
The money you put in gives you a tax deduction (RRSP-style).
When you pull it out to buy your first home, it’s tax-free (TFSA-style).
If you are looking to buy a house, this is your number one tax tool!
Who is eligible?
Before you get excited and run to your bank, make sure you check all the boxes:
Be 18 or older (or the age of majority in your province).
Be 71 or younger in the year you open the account.
Be a Canadian resident.
Not have lived in a qualifying home that you owned in the last 4 calendar years.
Not have a spouse/common-law partner who owned and lived in a qualifying home in the last 4 calendar years.
How FHSA Room Grows
CRA gives you $8,000 of new room each year after you open your first FHSA. You can carry forward up to $8,000 of unused room into future years. Unlike RRSPs and TFSAs, FHSA only start growing the year you open your account.
Example:
Open your FHSA in 2023 → you have $8,000 of room.
Skip contributing in 2023 → in 2024 you now have $16,000.
Contribute $5,000 in 2024 → you’ll still have $11,000 room left to carry forward.
Your lifetime max is $40,000, no matter how many accounts you open.
Worked Example – FHSA in Action
You open an FHSA in 2023 and contribute $5,000. In 2025, your total participation room is $24,000 ($8,000 for 2023, 2024 and 2025). Subtract your $5,000 contribution = $19,000 still available.
Growth & Withdrawals
You open your FHSA, congratulations! Here are some information you might want to consider.
Tax-Free: Withdrawals are tax-free only when used for a qualifying home purchase.
Taxable: Use it for anything else, and CRA treats it like RRSP income — full tax hit + withholding at source.
Interest, dividends, and capital gains inside FHSA don’t affect your contribution room.
Sometimes life happens and your dream home gets wrecked by poor timing, bad choices, or what we call Destiny. And yeah — for some of you, Destiny was your ex. But you can still salvage that.
Transfer the funds into your RRSP or RRIF (using CRA Form RC721) before closing your FHSA to avoid tax.
Bonus: this transfer doesn’t use up your RRSP room — it’s pure rollover.
RRSP Transfers
You might be surprise to learn that you can transfer money from your RRSP to your FHSA (using CRA Form RC720)! The catch?
You don’t get a second tax deduction — you already claimed one when you contributed to your RRSP.
So why bother transferring?
Because that RRSP money, which would normally be taxable when withdrawn, can now come out tax-free when used for your first home.
Example:
You have $30,000 in RRSPs. Your FHSA room is $19,000. You can transfer $19,000 — converting taxable RRSP dollars into tax-free FHSA dollars.
Only the FHSA holder can contribute — no spousal contributions like RRSPs.
Pro Tip: Pair FHSA with HBP
You can use both FHSA and HBP for the same home purchase — and you should if you want to maximize your buying power.
HBP lets you:
Withdraw up to $60,000 from your RRSPs
Repay it over 15 years (with a 2-year grace period)
Skip a repayment? That year’s amount becomes taxable.
Using FHSA + HBP together means you get:
Tax-free FHSA dollars
Interest-free loan from your RRSPs
This combo is one of the most powerful ways to build a down payment without triggering a massive tax bill.
Want the full breakdown?
Check out our Home Buyers’ Plan for detailed examples, rules, and Titan-level strategies.
I Qualified Home Criteria
So you are ready to buy. What now? To make a tax-free withdrawal, you must:
Meet the first-time homebuyer rule (you and spouse/common-law partner haven’t owned and lived in a qualifying home in the last 4 years).
Have a written agreement to buy or build by October 1 of the year following your withdrawal.
Intend to live there as your principal residence within one year.
CRA loves to drop terms like we all magically know what they mean — like a 4th grader listening to adult talk while fishing for boogers.
Here’s what a qualifying home actually means:
Single-family homes
Semi-detached homes
Townhouses
Mobile homes
Condominium units
Apartments in duplexes, triplexes, fourplexes, or apartment buildings
Co-op shares that give you an equity interest and right to occupy the unit
Rules you want to keep in mind
The FHSA is a powerful way to fund your first home — but with great rewards come a few rules you have to respect:
You can keep an FHSA open for 15 years after opening or until the end of the year you turn 71 — whichever comes first.
After your first qualifying withdrawal, you must close all your FHSAs by December 31 of the following year.
Contributions made in the first 60 days of the year count for the current year only (no carryback like RRSPs).
Non-Residency Rules
Ok, so for some reason you’re no longer a resident of Canada for tax purposes. Then what?
Unlike TFSAs, you can keep your FHSA open while you’re a non-resident — as long as you don’t make a qualifying withdrawal or buy a qualifying home during that time.
And here’s the kicker — you can still contribute.
Example:
You open your FHSA in 2023, but in 2024 you become a non-resident. You can still contribute your full $16,000 of available room in 2024. When you return as a resident in 2025, you can now use that money to buy your home tax-free.
But there’s a catch:
Withdraw while non-resident and CRA will hit you with a 25% withholding tax (treaty may reduce it, but still ouch). So be careful — this is one move you don’t want to misplay.
What If You Over-Contribute?
Same penalties as TFSA and RRSP — a beautiful 1% per month on the amount you’re over. CRA loves this one because it’s basically a slow drip of free money for them.
Here’s your game plan:
Step 1: Remove the excess ASAP to stop the penalty clock.
Step 2 (Power Move): If you have RRSP room, transfer the excess there instead. You’ll get a deduction for the year, and next year — when your FHSA room resets — you can transfer it back.
This way, you turn a mistake into a tax-saving opportunity.
RESP
The Playbook — RESP in 60 Seconds
Purpose: Save for anyone’s education — child, spouse, grandchild, even yourself.
Tax shelter: Earnings grow tax-deferred until withdrawn.
Contribution limit: $50 000 lifetime per beneficiary (tracked per person, not per plan).
Grants:
CESG: 20 % match on first $2 500 / year (+$100 extra for low income). Max $7 200 per beneficiary.
CLB: For low-income families — up to $2 000 total, no contribution needed.
Withdrawals:
Your contributions = tax-free.
Grants + earnings = taxed to the student (usually low rate).
If unused: Grants repaid; earnings taxed + 20 % — or transfer up to $50 000 of growth to an RRSP (if room).
Timing: 31 years to contribute; plan must close after 35 years.
Penalty: 1 % per month on over-contributions.
Titan Insight: Funds can be used for more than just university — trade schools, part-time college, and apprenticeship programs also qualify as long as they’re on CRA’s designated institution list. Check before you withdraw to avoid grant claw-backs.
What Is a RESP?
This one’s a bit more obscure — your neighbour Doug probably has no clue what it is. And no, it doesn’t stand for Royal Exotic Spiced Potage.
The Registered Education Savings Plan (RESP) is a government-approved account that helps you save money for anyone’s education — your child, spouse, grandchild, or even yourself if you ever decide to go back to school.
It looks a bit like an RRSP, right? Well, not quite. Here’s where most people mix things up.
Key Differences From an RRSP
Contributions aren’t deductible from your income.
Interest paid on RESP loans can’t be deducted.
Contribution limit is $50 000 per beneficiary.
When you open an RESP, you must name at least one beneficiary — the future student you’re saving for.
Example:
John has two kids, Lisa (9) and Bart (7).He opens one RESP and names both children as beneficiaries.
If Lisa goes on to grad school and Bart decides post-secondary isn’t for him, Lisa can still use the funds that were intended for Bart.
John could also open a separate RESP for each child and contribute up to $50 000 for each. Family plan? Same math — $50 000 tracked per beneficiary, not per plan.
The Bonus Grants — CESG & CLB
Here’s where the government actually helps (for once).Every RESP can trigger free money through two programs:
Canada Education Savings Grant (CESG)
Canada Learning Bond (CLB)
1. The Canada Education Savings Grant (CESG)
The government matches 20 % of the first $2 500 you contribute each year — that’s $500 per beneficiary.Low- and middle-income families can get a little extra:
Adjusted family net income (2024) | Additional CESG on first $500 contributed | Maximum yearly CESG (basic + additional) | Lifetime CESG per beneficiary |
≤ $55 867 | 20 % = $100 extra | $600 total | $7 200 |
$55 868 – $111 733 | 10 % = $50 extra | $550 total | $7 200 |
> $111 733 | Not eligible for extra | $500 total | $7 200 |
(Source: Government of Canada — CESG 2024)
Age Rule for 16–17-Year-OldsThe CESG doesn’t automatically apply once a child turns 16 — CRA wants to see long-term saving, not a last-minute lump sum. To qualify for grants at age 16 or 17, at least $2,000 total must have been contributed before the calendar year they turn 15, or at least $100 was contributed annually in four different years before that same point.
Example:
Lisa turns 16 in 2025. Her parent, John, contributed $200 in 2017, $500 in 2019, $800 in 2021, and $600 in 2024 — that unlocks eligibility for CESG payments through her 17th year. After that, the CESG ends the year the beneficiary turns 17, even if the RESP stays open and continues to grow.
Titan Insight: Skipped a year? You can catch up. Contribute $5 000 next year and still get both grants — $1 000 free money for showing up late.
2. The Canada Learning Bond (CLB)
This one’s the hidden gem. You don’t even need to contribute anything. The government just drops cash into your child’s RESP if your income qualifies.
Number of children | Adjusted family income (2024) |
1 – 3 | ≤ $57 375 |
4 | ≤ $64 733 |
5 | ≤ $72 123 |
(Source: Government of Canada — CLB 2024)
How much you get:
$500 when you open the RESP
$100 every year your child remains eligible (up to age 15)
Maximum $2 000 per child
And again — no personal contribution required.
Combine the Two
If you qualify for both CLB and Additional CESG, you can double-dip:
up to $600 CESG + $100 CLB every year. That’s $700 in free money just for keeping an RESP open and active.
Timing Rules
You have 31 years to contribute, and the plan must close 35 years after opening. If cash is tight early on, wait a bit — just remember that early contributions earn more grant years.
Changing Beneficiaries
If your kid decides barista life is the dream, you can name a new beneficiary — within limits. To avoid penalties, transfers must stay within blood/adoption relations, and both beneficiaries must be under 21.The new beneficiary inherits contribution room but never exceeds the $50 000 per-child limit.
If You Need the Money Back
You can always withdraw your own contributions tax-free — that’s the easy part. But when you start taking money out, CRA splits it into three categories:
Type | What it means | Who can receive it | Who gets taxed |
PSE (Post-Secondary Education amount) | Your original contributions. Already-taxed money you put in. | Subscriber or Beneficiary | No one. Tax-free. |
EAP (Educational Assistance Payment) | The growth and grants portion — the money earned while the RESP was invested. | Beneficiary (student) | Taxed to the student. Usually little to no tax thanks to credits. |
AIP (Accumulated Income Payment) | The growth portion that’s left when no one goes to school. | Subscriber | Taxed to you + 20% penalty (unless rolled into your RRSP if you have room). |
Example:
John contributed $10 000; the RESP grew to $15 000.Lisa is in university, so John withdraws $5 000 as an EAP for tuition. Lisa reports the $5 000 on her tax return — but with tuition credits and no other income, she pays zero tax.
If no one studies, those same earnings are called AIP (Accumulated Income Payments) —and that’s when you get taxed plus 20 %, unless you move them into your RRSP.
The AIP Escape Hatch
If no one studies, after 10 years (and beneficiaries over 21), you can move up to $50 000 of RESP income into your RRSP — no 20 % penalty if you have room. That’s how you rescue the growth instead of donating it to CRA.
Note: The transfer only works if you or your spouse have available RRSP contribution room in your own name. No room = tax + 20 % penalty.
The Slap Ruler — Where CRA Smacks Hard
1. Over-Contribution
Go even $1 over your available room and CRA hits you with a 1 % per-month tax on the excess until it’s fixed. They calculate it daily but bill monthly — so “just for a few days” still costs you.
Titan Insight: keep a tally if grandparents or multiple people contribute. CRA doesn’t care who did it; it only counts totals.
2. Grant Claw-Backs
Take money that isn’t used for school and the government takes back its portion first — CESG, CLB, the whole ladle. If the student drops out after a payout, Ottawa can reclaim the overpaid grant.
Titan Insight: If a student leaves after at least 13 weeks of enrolment in a qualifying program, the EAPs already paid are safe — CRA won’t claw them back retroactively.
3. Wrong Beneficiary Switch
Change the beneficiary without following blood-relation and age rules?CRA can cancel grants, trigger an over-contribution, or both.Transfers are safe only if the new beneficiary is under 21 and a blood or adopted relative of the previous one.
4. Non-Qualifying Investments
Put anything weird in an RESP — like private company shares, crypto, or margin-based stuff — and CRA calls it non-qualified. That means:
Income taxed directly to you, and
Another 1 % per-month penalty on the value of the bad investment.
Stick to normal ETFs, stocks, and GICs. Don’t get fancy.
The AIP Trap — Accumulated Income Payment
When nobody goes to school, the AIP lets you pull out the growth part of the RESP. But:
You must have had the plan open at least 10 years,
Every beneficiary must be over 21 and not in school, and
You must close the plan within 35 years.
Meet those and you can transfer up to $50 000 of earnings to your RRSP (if you have room) — no 20 % penalty. Skip a condition and CRA reclassifies everything as a regular withdrawal, taxing it and adding the 20 % hit.
6. Forgetting to Close the Plan
At 35 years (or 40 for disability RESPs) the clock runs out. Grants are clawed back, earnings are taxed, and you’re left with detention.
Titan Insight
If your child delays school or switches to a trade, don’t close the RESP too soon. Funds can still be used for trade programs, part-time study, or later university. Patience keeps your grants alive and your soup simmering.
HBP
The Playbook — Home Buyers’ Plan in 60 Seconds
Purpose: Tap your RRSP to buy or build your first home — no tax hit up front.
Limit: $60 000 per person ($120 000 per couple).
Repayment: 15 years to pay it back → 2-year grace before starting → 2022–2025 withdrawals get +3 years extra.
If skipped: Missed payment = taxable income for that year.
Qualifies if: You (or your partner) haven’t owned and lived in a home in the last 4 years.
Combine it: Stack with FHSA for double tax wins — refund now, tax-free later.
Rules: RRSP deposit ≥ 90 days old before withdrawal • Buy/build by Oct 1 next year.
Re-use: Once fully repaid, you can do it again.
Titan Tip: Use HBP + claim First-Time Home Buyers’ Credit (HBTC).Every Titan takes every advantage.
What Is the HBP
This one was very popular before the FHSA came out. Since then, it took a step back because the FHSA became the shiny new thing. But don’t confuse the acronym — it doesn’t stand for Hot Buttered Potage. The Home Buyers’ Plan is still a beautiful tool that’s been overlooked since the FHSA took the spotlight.
In a nutshell, the Home Buyers’ Plan (HBP) allows you to withdraw funds from your RRSP to buy or build a qualifying home. The cap is $60,000 per person — and if you’re buying with a partner, that’s up to $120,000 combined.
If you missed or forgot what a qualifying home is, click here to check the definition we discussed in the FHSA section.
How Does It Work
You’ve got a qualifying home you want to buy, and you’ve put RRSPs aside. Now, you can withdraw those RRSP funds to use as a down payment.
The difference from the FHSA? You have 15 years to repay what you withdraw, and you get two years of breathing room before repayments even start.
Example:
You withdraw $15,000 from your RRSP under the HBP in 2025.For the 2025 and 2026 tax years, you don’t have to repay anything. Starting in 2027, you must repay 1/15th of the amount each year — that’s $1,000 annually in this example.
The government is also allowing an extra relief of three years for withdrawals made between January 1, 2022, and December 31, 2025.
So, in the example above, the repayment would start in 2030 instead of 2027.
You qualify as a first-time buyer if you (or your spouse/common-law partner) haven’t owned and lived in a home as your principal residence in the last four calendar years.
Once your HBP is fully repaid, you can even use it again in the future — a lesser-known second-chance move that most people miss.
What Happens If You Don’t Repay Your RRSP?
Excellent question. If you skip your HBP repayment, you’re essentially taxing yourself on that portion.
Using the same example: you owe a $1,000 repayment in 2027 but don’t make it. That $1,000 gets added to your income for that year. At a 25% tax rate, that’s $250 of tax owed.
There’s no right or wrong here — it’s flexible by design. You can use your RRSP savings to buy your home now, and if a tough year hits, you pay a little tax instead of breaking the bank. Got extra cash next year? Repay more and let it grow again for retirement. It’s one of the rare cases where CRA gives you breathing room and control.
Can I Combine FHSA and HBP?
YES! Say it louder for Bob in the back who was half asleep — yes, you absolutely can combine both. There’s no restriction on how you do it, and combining them can be a massive tax advantage.
As we saw in the FHSA section, your limit after five years of opening it is $40,000 in contributions. Let’s say you want to wait two more years before buying — instead of letting cash sit around, dump that money into RRSPs. Why? You get an instant tax refund now, and you can repay it over 15 years later.
Example:
You open your FHSA today and plan to buy in three years. That means your FHSA will reach a $24,000 limit (it grows $8k per year).You plan to save $39,000 total toward your home. You max your FHSA at $24,000, then put $15,000 into RRSPs.
At a 25% tax rate, that RRSP contribution gives you a $3,750 refund over the three years — so your real cost is only $11,250.If you’re in a higher tax bracket, your savings are even greater.That’s compound efficiency — Titan style.
Limitations
Your RRSP contributions must be made at least 90 days before the home purchase. Otherwise, they don’t count.
Make sure you have RRSP contribution room — overcontributing triggers penalties (see the RRSP section).
If you withdraw funds but don’t buy or build your qualifying home before October 1 of the year after the withdrawal, the entire amount becomes taxable income.
Titan Tip
If you’re eligible for the HBP, you’re also eligible for the First-Time Home Buyers’ Credit (HBTC). Don’t forget to claim it!
Coming Soon:
LIRA (Locked-In Retirement Account): Where your old pension goes to chill until retirement — you can’t touch it early, but it keeps growing.
RRIF (Registered Retirement Income Fund): The RRSP’s endgame — when you retire, your RRSP transforms into this, and it starts paying you back.
💡 Bookmark this guide — we’re building the most complete CRA playbook online. Each update drops fresh insights you won’t want to miss.
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