Quick Facts
- $60,000 max per person (increased from $35,000 in Budget 2024) — no tax at withdrawal
- $120,000 per couple if both partners qualify as New Home Buyers
- 15 years to repay, starting the second year after the withdrawal year
- 90-day rule: RRSP funds must sit in the account 90 days before withdrawal or they don't qualify
What is the Home Buyers' Plan?
The Home Buyers' Plan (HBP) allows New Home Buyers to withdraw up to $60,000 from their RRSP to purchase or build a qualifying home — completely tax-free at withdrawal. The 2024 federal budget increased this limit from $35,000 to $60,000, significantly boosting down payment power for Canadian buyers.
Unlike the FHSA, an HBP withdrawal is not a gift. You are borrowing from your future retirement. The full amount must be repaid to your RRSP over 15 years. Miss a repayment, and the CRA adds that year's minimum to your taxable income.
Who Qualifies?
- New Home Buyer: Haven't owned and lived in a qualifying home in the current year or preceding 4 calendar years
- Signed APS: Must have a signed Agreement of Purchase and Sale for a qualifying home
- Principal Residence: Must intend to occupy as principal residence within one year of purchase or build completion
- Each partner in a couple can make their own $60,000 withdrawal independently
The 90-Day Rule: Don't Get Caught
Funds must sit in your RRSP for 90 consecutive days before withdrawal under the HBP. This is a hard CRA rule — not a guideline.
Common mistake:
Rushing a lump sum into your RRSP weeks before closing to boost your down payment. Those specific funds won't qualify for the HBP and could trigger a taxable withdrawal.
Action: If your closing is in the next 3 months, work only with RRSP funds already in the account. Plan any new contributions at least 90 days in advance.
When the HBP Makes Sense — and When It Doesn't
Strong Case for Using
- Substantial RRSP savings already sitting for 90+ days
- Down payment would otherwise be under 20%, triggering CMHC insurance
- Income is likely to be lower in future years (lower tax burden)
- Buying with a partner who also qualifies (doubling access)
Weaker Case for Using
- Withdrawing removed long-term compounding from high-performance holdings
- Close to retirement (repayment strains savings runway)
- No existing RRSP savings (90-day rule limitation)
- FHSA room available (priority #1 — no repayment required)
The Real Cost of a Missed HBP Repayment
Missing an annual HBP repayment is more expensive than most buyers realize. When you miss a designated repayment, the CRA doesn't just waive it — they add that year's minimum to your taxable income.
Example Path to Extra Tax:
- You withdrew $60,000 in 2026
- Annual minimum repayment starting in 2028: $4,000/year
- You miss the 2029 repayment
- CRA adds $4,000 to your 2029 taxable income
- At a 43% marginal rate (Ontario, $100K income), that costs you $1,720 in extra taxes
The missed repayment doesn't disappear. It just costs you more in tax that year. Set up an automatic annual RRSP contribution designated as an HBP repayment on your Schedule 7.
HBP vs. FHSA: Which Should You Prioritize?
Step 1: Max your FHSA first
Tax-deductible contributions, tax-free withdrawals, no repayment ever. Strictly superior on a standalone basis.
Step 2: Stack the HBP on top
Use it if you need additional down payment capital and have qualifying RRSP savings. The repayment obligation is manageable if income is growing.
Step 3: Aim for the 20% mark
On a $700,000 purchase with 10% down, hitting 20% saves approximately **$19,950 in CMHC premiums** added to your mortgage.
Step-by-Step: Making an HBP Withdrawal
- Confirm you have a signed APS with a qualifying closing date
- Download Form T1036 from the CRA website
- Complete Part 1 and submit to your RRSP issuer (bank or broker)
- The institution processes the withdrawal — no tax withheld
- The withdrawal appears on your T4RSP slip as an HBP withdrawal
- Report on your T1 income tax return for the withdrawal year
Repayment: What You Actually Owe
Starting in the second year after your withdrawal year, you must repay 1/15th of the total withdrawn annually for 15 years.
| Year | Annual Minimum | Cumulative Repaid | Balance Remaining |
|---|---|---|---|
| 2027 | $0 (grace year) | $0 | $60,000 |
| 2028 | $4,000 | $4,000 | $56,000 |
| 2029 | $4,000 | $8,000 | $52,000 |
| 2030 | $4,000 | $12,000 | $48,000 |
You can always pay back more than the minimum in any year to reduce the balance faster and minimize the retirement savings gap.
HBP + FHSA: The $200,000 Stack
| Buyer | FHSA | HBP | Total |
|---|---|---|---|
| Single buyer | $40,000 | $60,000 | $100,000 |
| Couple (both qualifying) | $80,000 | $120,000 | $200,000 |
Official Source: CRA — Home Buyers' Plan
This content is for educational purposes and does not constitute financial or tax advice. Consult a qualified financial advisor or tax professional regarding your specific circumstances. Official program rules are governed by the Canada Revenue Agency.