How to choose FHSA vs HBP First Home Savings Account vs Home Buyer's Plan | Personal Tax Advisors

What is the difference between FHSA and RRSP first time home buyers (HBP)?
Should you make your down payment using the Home Buyers' Plan (HBP) or the newer First Home Savings Account (FHSA)? In this video we compare the differences between the FHSA vs the HBP so you can choose which works best for you.

==Can I combine the HBP and FHSA to help me buy my first home?==
YES! New rules mean you can now use a combination of *both* types for the same down payment.

==How is the FHSA different from the HBP?==
They differ in the amounts you can contribute and the rate at which you can contribute. They also differ in the tax impact of your withdrawals, when you go to use them. Which is better, depends on your timeline, your income, and your goals.

==Does FHSA reduce taxable income?==
YES. Contributions to the FHSA reduce taxable income, just like contributions to a regular RRSP (for later withdrawal under the HBP). The main differences between the two happen when you make the withdrawal to buy a home.

==Disadvantages to the FHSA==
It is a *dedicated* fund that really can't be used for anything but buying a home. HBP withdrawals are funded by your RRSPs -- but if you decide not to use the RRSP funds to buy a house, you can still keep them for their main purpose, which is to grow long-term and help fund your lower-earning years (i.e., retirement).

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***UPDATE*** New rules mean you can use a combination of both FHSA and HBP withdrawals. How are you planning to make a down payment? Let me know in the comments! ❤🌞