However, there are some differences between HBP RRSP withdrawal and FHSA withdrawal, which may give FHSA a slight advantage when planning to buy a home.
Compare the best FHSA rates in Canada
Extract FHSA
First, if you don’t use FHSA, you’ll lose. Unlike RRSP Contribution Rooms, the FHSA Contribution Rooms are not carried once you purchase a home. If you don’t own a home for at least four years, you can use FHSA as a first-time home buyer, but if you become a homeowner and stay with the rest of your homeowner’s life, you may lose the only chance to use the account.
Second, once you exit FHSA, that’s the end of the story. No repayment requirement.
Retrieve home purchase plan
However, extracting HBP from your RRSP, with the string attached. You need to withdraw 1/15 of the 15th edition each year. The payments usually begin two years after the evacuation, but temporarily evacuated by December 31, 2025, which makes repayment also possible in the fifth year after the evacuation.
If you do not repay the amount required within a given year, any deficits will increase in revenue for that year. So unlike the actual loan, you don’t need to repay the full amount through HBP. However, you do pay taxes for any outstanding amount due, and you will lose the ability to permanently re-group that amount to your RRSP.
Combined with FHSA and HBP withdrawal
When you use HBP to evacuate from FHSA or RRSP, you don’t need to use every penny to make a down payment. In fact, most home buyers will use withdrawals directly or indirectly for a down payment, but technically the only requirement is to buy a qualified home.
So in your case, Ryan, you can certainly block funds from being used for renovations.
When you use HBP to withdraw eligible withdrawals from FHSA or RRSP, you do not need to use withdrawal specifically to make your down payment. In fact, most homebuyers will use withdrawals directly or indirectly for a down payment, but technically the only requirement for withdrawals is that you are buying a qualified home.
