Get To Know the Canadian RRSP Home Buyers’ Plan (HBP)

Buying your first home in Canada isn’t easy these days. Mortgage rates have gone up, and even though prices have dipped in some areas, the overall cost of homeownership still feels out of reach for many first-time buyers. That’s where the RRSP Home Buyers’ Plan (HBP) steps in — giving you a leg up by letting you use your retirement savings to fund your home purchase.
Let’s break it down: how the HBP works, who qualifies, and what you need to know about paying it back.

What Is the RRSP Home Buyers’ Plan (HBP)?

The Home Buyers’ Plan is a federal government program that lets you withdraw up to $60,000 tax-free from your RRSP to buy or build a qualifying home. If you’re purchasing with a spouse or partner, you can each withdraw up to $60,000 — that’s a combined $120,000 towards your down payment.
Usually, RRSP withdrawals are taxed as income. But with the HBP, that money is temporarily loaned to yourself and won’t be taxed — as long as you follow the repayment rules.
The catch? You’ll need to repay the amount you withdrew over a 15-year period, starting two years after the withdrawal. If you skip a payment, the missed portion gets added to your income that year and is taxed accordingly.
You’ll need to complete Form T1036 with your financial institution to apply. After the withdrawal, you’ll get a T4RSP slip to include in your tax return, confirming the withdrawal amount.

---

Who’s Eligible for the HBP?

Not everyone can dip into their RRSP for a home purchase. To qualify for the HBP, you must:

• Be a Canadian resident when you make the withdrawal
• Be a first-time homebuyer (you haven’t owned a home that you or your spouse lived in within the last 4 years)
• Have RRSP contributions that have been in your account for at least 90 days
• Have a written agreement to buy or build a qualifying home
• Intend to live in the home as your principal residence within one year

There are exceptions for people with disabilities or those buying on behalf of a relative with a disability. There are also updated rules for separated individuals, who may still qualify even if they’ve owned a home in the last four years, as long as they’ve been living apart from their spouse for at least 90 days.

---

RRSP Withdrawal Rules for First-Time Buyers

Here’s what you need to know if you’re thinking of using your RRSP under the HBP:

• You can withdraw up to $60,000 from your RRSP (per person)
• You can use it to buy or build a qualifying home — including for a relative with a disability
• The funds must have been in your RRSP for at least 90 days
• You must withdraw before closing (or within 30 days after)
• You’ll need to fill out and submit Form T1036 to your RRSP issuer

The withdrawal itself won’t show up as income, but it will show on your taxes.

---

Repaying the RRSP Loan

You’ll get a two-year grace period before you need to start repaying what you withdrew. After that, you’ll have 15 years to pay it back in equal installments.
That means if you withdrew $45,000, you’d need to repay $3,000 per year, starting the third year. You can repay more than the minimum, and even pay it all back sooner if you’d like.
To repay, simply contribute to your RRSP, then designate that amount as your HBP repayment on your tax return. Each year, the CRA will send you a notice showing how much you owe and how much you’ve already repaid.
If you don’t make the minimum repayment, the difference will be added to your taxable income.

What If You Miss a Payment?

Life happens — and if you skip a repayment or contribute less than you should in any given year, that portion becomes taxable income. That could increase your tax bill for the year, but it won’t disqualify you from the program entirely.
You’ll still need to continue repaying your remaining HBP balance in future years, until it’s paid off.

---

Frequently Asked Questions

Is an RRSP better than a TFSA for first-time homebuyers?
It depends. RRSPs give you an upfront tax deduction and the HBP lets you withdraw up to $60,000 tax-free. But TFSA withdrawals are always tax-free and don’t need to be repaid. Some buyers use both.
Can I use the HBP more than once?
Yes, but only if your previous HBP balance is paid off in full by January 1 of the year you plan to withdraw again.
Do I have to repay if I don’t end up buying the home?
If you don’t buy or build a qualifying home by October 1 of the year after your withdrawal, your RRSP withdrawal will be taxed as income.

Wrapping It Up

The RRSP Home Buyers’ Plan can be a game-changer for first-time buyers in Canada. It gives you access to your retirement savings now, without tax penalties — as long as you repay it properly.
Whether you’re saving solo or buying with a partner, tapping into the HBP could get you into your first home faster. But like any financial tool, it comes with rules. Understanding how the plan works — and planning your repayment strategy — will help you make the most of it.

🏠 Planning to Use Your RRSP for a Down Payment?
The Home Buyers’ Plan lets you borrow from your RRSP — but there are rules, limits, and repayment timelines to get right. Let our mortgage experts help you make the most of the HBP without any costly surprises. 📞 Talk to an Expert About Using Your RRSP for a Home