How Does the Home Buyers' Plan Work in Canada? RRSP Withdrawal Rules

Buying your first place can make your RRSP feel less like “retirement money” and more like a possible down payment. That is exactly what Canada’s Home Buyers’ Plan (HBP) is for. It lets eligible first-time buyers take money out of an RRSP without paying tax right away, then put it back over time.

For students, new grads, and people in their first full-time jobs, the HBP can be useful—but it is not free money. You need to meet the CRA’s eligibility rules, keep track of deadlines, and budget for future repayments. A $60,000 withdrawal can make a big difference to your down payment, but missing repayments can raise your taxable income later. Here is how the Home Buyers’ Plan works before you move money out of your RRSP.

Quick answer: The Home Buyers’ Plan lets eligible Canadians withdraw up to $60,000 from their RRSP to buy or build a qualifying home without immediate tax. You generally repay the amount to your RRSP over 15 years; if you miss a required repayment, the missed amount is added to your taxable income for that year.

How does the Home Buyers’ Plan work in Canada?

The Home Buyers’ Plan lets you withdraw RRSP money for a first home without the usual withholding tax or immediate income tax bill. Normally, taking money from an RRSP before retirement counts as taxable income. Under the HBP, the withdrawal is not taxable when you take it out, as long as you qualify and follow the program rules.

The maximum HBP withdrawal is $60,000 per person. If you are buying with a partner and you both qualify, you could potentially use up to $120,000 combined from your RRSPs. You can make one withdrawal or a series of withdrawals, but they must be made in the same calendar year and cannot total more than your personal limit.

You request the money from your RRSP provider using CRA Form T1036, Home Buyers’ Plan Request to Withdraw Funds from an RRSP. Major providers such as Wealthsimple, Questrade, your bank, or a credit union can guide you through their own withdrawal process, but they still need the CRA form.

The HBP money can help with your down payment, legal costs, moving costs, or other home-buying needs. Still, it should be part of a bigger plan: your down payment is not the only cash you need. Read what costs come after the down payment when buying a home in Canada before you decide how much to withdraw.

Who qualifies for an HBP RRSP withdrawal?

You generally qualify for the Home Buyers’ Plan if you are a Canadian resident, have a written agreement to buy or build a qualifying home, and meet the CRA’s first-time home buyer test. “First-time” does not necessarily mean you have never owned property in your life. It usually means you did not own and live in a home as your principal residence during the previous four calendar years.

For example, if you rent an apartment in Toronto and have never owned a home, you will likely meet this test. If you owned a condo several years ago but have rented since then, you may qualify again once you pass the four-year period. The CRA’s exact test looks at whether you lived in a home you owned or jointly owned.

If you have a spouse or common-law partner, their housing history can matter too. You generally cannot use the HBP if you lived in a home that your spouse or partner owned during the four-year period, even if your name was not on the title.

Your RRSP contribution must also stay in the account for at least 90 days before you withdraw it through the HBP. That means you cannot deposit $10,000 today and pull it out next week under the program. You also need to intend to occupy the home as your principal residence within one year of buying or building it.

Quick tip: If you are hoping to use the HBP within the next year, set a calendar reminder for the 90-day RRSP rule before making your contribution—especially if you are trying to claim the RRSP deduction at tax time.

When do Home Buyers’ Plan repayments start, and what happens if you miss one?

Home Buyers’ Plan withdrawals must be repaid to your RRSP over 15 years, and a missed repayment becomes taxable income. Your annual repayment amount is usually one-fifteenth of the amount you withdrew. If you withdrew the full $60,000, that works out to at least $4,000 per year for 15 years.

The start date depends on when you made your withdrawal. For HBP withdrawals made from 2022 through 2025, the federal government temporarily delayed the start of repayments. If you withdrew money in 2025, for example, your first repayment is generally due in 2030. For a withdrawal made in 2026, repayments would generally begin in 2028.

Each tax year, the CRA shows your required HBP repayment on your Notice of Assessment and in CRA My Account. To make a repayment, contribute to your RRSP as usual and designate all or part of that contribution as an HBP repayment on your tax return.

An HBP repayment does not create a new RRSP deduction. If your minimum repayment is $4,000 and you designate only $2,500, the remaining $1,500 is added to your taxable income for that year. That can mean more tax owing, especially as your salary grows. Build the repayment into your future budget instead of treating it as a surprise.

Should you use the HBP, an FHSA, or both for your first home?

Using both an FHSA and the Home Buyers’ Plan can be the strongest tax-efficient option if you have the cash and time to save. An FHSA, or First Home Savings Account, lets eligible first-time buyers contribute money, get an income-tax deduction, and later make a qualifying home withdrawal tax-free with no repayment requirement.

The FHSA has an $8,000 annual contribution limit and a $40,000 lifetime contribution limit. Unlike the HBP, you do not need to pay your qualifying FHSA withdrawal back. That makes it a great account to prioritize when you know home ownership is a goal but are not buying immediately.

You can use an FHSA withdrawal and an HBP withdrawal for the same qualifying home. For example, a couple could potentially combine FHSA savings, RRSP withdrawals through the HBP, and regular savings for their purchase. Keep short-term home money in a safe place, such as a high-interest savings account or cash ETF, rather than taking big investment risks right before you need it. Compare options in our guide to high-interest savings accounts in Canada.

The main tradeoff is future flexibility. An HBP gets you access to RRSP funds now, but it creates a 15-year repayment commitment. If you have high-interest debt, unstable income, or no emergency fund, it may be smarter to strengthen your finances first.

Frequently Asked Questions

How much can I withdraw from my RRSP under the Home Buyers’ Plan?

You can withdraw up to $60,000 from your RRSP under the Home Buyers’ Plan if you qualify. If two eligible buyers purchase together, they can each withdraw up to $60,000, for a potential combined total of $120,000. The withdrawal is not taxed immediately, but it must generally be repaid over 15 years.

Do I have to be a first-time home buyer to use the Home Buyers’ Plan?

Yes, you generally need to meet the CRA’s first-time home buyer definition to use the Home Buyers’ Plan. Usually, that means you did not own and live in a home as your principal residence during the previous four calendar years. Some exceptions can apply for people buying a home for a related person with a disability.

How long does money need to be in my RRSP before I use the HBP?

Your RRSP contribution generally needs to stay in the account for at least 90 days before you withdraw it through the Home Buyers’ Plan. If you withdraw sooner, you may not be able to claim the full RRSP deduction for that contribution. Plan early if your purchase date is getting close.

When do I start repaying the Home Buyers’ Plan?

Most HBP withdrawals are repaid over 15 years, with annual minimum repayments shown on your CRA Notice of Assessment. Withdrawals made from 2022 through 2025 have a five-year repayment grace period; a 2025 withdrawal generally starts repayment in 2030. A 2026 withdrawal generally starts repayment in 2028.

Can I use an FHSA and the Home Buyers’ Plan together?

Yes, you can generally use both an FHSA qualifying withdrawal and a Home Buyers’ Plan RRSP withdrawal for the same first home. An FHSA withdrawal does not need to be repaid, while HBP funds do. Using both can increase your down payment, but only withdraw amounts that fit your future budget and repayment plan.

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