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Summary: The Home Buyers' Plan (HBP) lets a first-time buyer withdraw up to $60,000 from their RRSP, tax-free, to buy or build a home ($120,000 for a qualifying couple). The money has to have been in the RRSP at least 90 days, and you repay it to your RRSP over 15 years.
Saving for a first home is one of the hardest parts of buying, and a few federal programs exist to help. The Home Buyers' Plan is one of the most useful, because it lets you put money you have already saved for retirement toward your down payment without paying tax on the withdrawal. For the full set of programs, see our guide to first-time home buyer incentives in Ontario.
What is the Home Buyers' Plan?
The Home Buyers' Plan is a federal program that lets eligible first-time buyers withdraw up to $60,000 from their Registered Retirement Savings Plans (RRSPs) tax-free to put toward a qualifying home. The limit rose from $35,000 to $60,000 for withdrawals made after April 16, 2024. It is effectively an interest-free loan from your own retirement savings, which you pay back over time.
Who qualifies for the Home Buyers' Plan?
You must meet several conditions set by the Canada Revenue Agency. If you are withdrawing to help a relative with a disability buy a home, you still have to meet the conditions yourself.
Canadian resident. You must be a resident of Canada from the time of withdrawal until the home is bought or built.
First-time home buyer. You qualify if you (or your spouse or common-law partner) did not own and occupy a home as your principal residence in the year of withdrawal or the previous four calendar years.
Written agreement. You must have a written agreement to buy or build a qualifying home.
Intent to occupy. You must intend to live in the home as your principal residence within one year of buying or building it.
How much can you withdraw?
You can withdraw up to $60,000 on your own, or $120,000 as a couple where both partners qualify and each withdraws from their own RRSP. The funds must have sat in your RRSP for at least 90 days before withdrawal, or they are not eligible. Withdraw only what you need, since every dollar taken out is a dollar that stops growing for retirement.
How do you withdraw the money?
The withdrawal is a short, form-driven process you complete with your financial institution.
Confirm eligibility. Make sure you meet the conditions above and that your contributions have been in the RRSP for at least 90 days.
Complete Form T1036. Fill out Form T1036 for each RRSP account you want to withdraw from.
Submit to your institution. Give the form to the bank or issuer holding the RRSP. They release the funds, usually within a few days to a few weeks, and report the withdrawal to the CRA.
How do you repay the Home Buyers' Plan?
You repay the amount you withdrew to your RRSP over a period of 15 years. Repayment normally begins the second year after the year of your first withdrawal, and each year you must repay at least 1/15 of the total or that year's share is added to your taxable income. There is no cap on paying it back faster.
A temporary measure deferred the start of repayment to the fifth year for buyers whose first withdrawal fell between January 1, 2022 and December 31, 2025. For first withdrawals made in 2026 or later, the standard second-year start applies. As an example, a $60,000 withdrawal repaid on the minimum schedule works out to $4,000 a year.
What are the benefits and drawbacks?
The main benefit is that you fund part of your down payment with money you saved before tax, which can make a purchase achievable sooner. The trade-off is that the money leaves your retirement savings while it is repaid, so it stops compounding in the meantime.
Benefit | Drawback | |
Tax | Withdrawal is tax-free if repaid on schedule | A missed yearly repayment is added to your taxable income |
Down payment | Frees up to $60,000 ($120,000 per couple) | Reduces the retirement savings working for you |
Flexibility | You can repay faster than the minimum | You are committed to 15 years of repayments |
You can also use the HBP alongside the First Home Savings Account (FHSA) for the same purchase, which is how many first-time buyers maximize their down payment.
Frequently asked questions
How much can I withdraw under the Home Buyers' Plan?
Up to $60,000 from your RRSP, tax-free, for withdrawals made after April 16, 2024. A qualifying couple can withdraw up to $60,000 each, for $120,000 combined.
Who qualifies as a first-time home buyer for the HBP?
You qualify if you (or your spouse or common-law partner) did not own and occupy a home as your principal residence in the year of withdrawal or the previous four calendar years, and you are a Canadian resident with a written agreement to buy or build.
When do I have to repay the Home Buyers' Plan?
Repayment to your RRSP runs over 15 years and normally starts the second year after the year of your first withdrawal. A temporary measure deferred that to the fifth year for first withdrawals made between 2022 and 2025.
What happens if I miss a repayment?
If you repay less than the required 1/15 in a given year, the shortfall is added to your taxable income for that year and taxed at your marginal rate.
Can I use the HBP and the FHSA together?
Yes. The Home Buyers' Plan and the First Home Savings Account are separate programs and can be combined for the same home purchase.
Do the funds need to be in my RRSP for a minimum time?
Yes. Contributions must remain in the RRSP for at least 90 days before withdrawal, or they are not eligible for the HBP.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law. Once you have found a home and are ready to close, our lawyers handle the legal side with a simple online platform and a team that stays with you the whole way. You can start your closing online or get in touch with any questions.
Legal references: Income Tax Act (Canada), s. 146.01 (Home Buyers' Plan); Budget 2024 (increase of the HBP withdrawal limit to $60,000 and temporary extension of the repayment grace period).
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
