Home Buyers' Plan (HBP): RRSP Withdrawal for Your First Home

This article is general information, not financial or tax advice. HBP rules are administered by the Canada Revenue Agency. Confirm your specific situation with a qualified advisor or CRA before making decisions.

The Home Buyers' Plan (HBP) lets you withdraw money from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying first home — without paying income tax on the withdrawal, as long as you repay it over time. It has been a staple of Canadian first-time buyer planning since 1992, and a significant rule change in 2024 made it more useful than ever.

The 2024 change: limit raised from $35,000 to $60,000

Before April 16, 2024, the maximum HBP withdrawal was $35,000 per person ($70,000 per couple). The 2024 federal budget (Bill C-69) raised this to $60,000 per person ($120,000 per qualifying couple) for withdrawals made on or after April 16, 2024.

This is a meaningful increase. A couple who each have at least $60,000 in RRSP savings can now access up to $120,000 in down payment funds under the HBP, with no income tax at the time of withdrawal — subject to repayment over the following 15 years.

Sources: Budget 2024 (Government of Canada, April 16, 2024); Bill C-69 implementation; Canada Revenue Agency HBP program rules. See canada.ca/en/revenue-agency.

How the HBP works

The mechanics are straightforward:

You withdraw from your RRSP using CRA Form T1036.
No tax is withheld at the time of withdrawal — the money comes out in full.
You must buy or build the qualifying home by October 1 of the year following the year of withdrawal.
Starting the second year after the withdrawal (or up to five years later under the temporary grace period), you begin repaying the amount to your RRSP.
Each year's required repayment is 1/15th of the total withdrawn. For a $60,000 withdrawal, that is $4,000 per year for 15 years.
If you miss a required repayment in a given year, that year's missed minimum is added to your taxable income — you effectively pay tax on it as if it were an RRSP withdrawal.

Eligibility

To make an HBP withdrawal you must:

Be a first-time home buyer: you (and, if applicable, your spouse or common-law partner) must not have owned a principal residence that you occupied at any time during the year of withdrawal or during the four preceding calendar years.
Have a written agreement to purchase or build a qualifying home in Canada before the time of withdrawal.
Intend to occupy the home as your principal residence within one year of acquiring or completing construction.
Not currently have an outstanding HBP balance from a previous participation (you can participate more than once, but only after fully repaying a prior HBP withdrawal and waiting the required period).

The 90-day rule for RRSP contributions

RRSP funds contributed within 90 days before you withdraw them under the HBP do not qualify. Only money that has been sitting in your RRSP for at least 90 days counts toward the HBP withdrawal. This prevents last-minute contributions made specifically to boost the withdrawal — plan ahead and ensure your funds have seasoned.

Repayment rules and the extended grace period

Standard repayment: Repayment begins in the second calendar year after the year of your first HBP withdrawal. For a first withdrawal in 2024, standard repayment begins in 2026. The 15-year repayment period then runs from that starting point.

Budget 2024 — extended grace period: For HBP withdrawals made between January 1, 2022 and December 31, 2025, the 2024 budget extended the grace period from 2 years to 5 years. Repayment for those withdrawals begins up to 5 years after the first withdrawal, rather than 2 years. The 2026 Spring Economic Statement extended this rule further: for first withdrawals between January 1, 2026 and December 31, 2028 (with a completion date before 2030), the same 5-year grace period applies.

This extension was designed to help buyers affected by construction delays, rising rates, and the transition to the higher $60,000 limit.

What happens if you under-repay: The minimum annual repayment is 1/15th of the total amount withdrawn. If you contribute less than the minimum to your RRSP in a given year, the difference is added to your taxable income for that year — it is treated as if you withdrew it from your RRSP without the HBP shelter. Interest or penalties do not apply separately; the income inclusion is the consequence.

Additional repayments: You can repay more than the minimum in any year. Extra contributions beyond the minimum reduce the balance and lower future required repayments. Repayments are designated on Schedule 7 of your annual tax return and do not count as new RRSP contributions for deduction purposes.

HBP and FHSA: using both together

If you have both RRSP savings and an FHSA, you can use both on the same first-home purchase. They are not mutually exclusive:

FHSA withdrawal: tax-free, no repayment required
HBP withdrawal: no tax at withdrawal, but must repay over 15 years

For most buyers, the priority order is:

Exhaust the FHSA first (no repayment obligation)
Then draw on the HBP for additional down payment funds (with the repayment obligation accepted)

A couple could access up to $40,000 each from their FHSAs ($80,000 combined) and up to $60,000 each from HBPs ($120,000 combined), for a potential total of $200,000 in registered account funds toward a down payment.

What the HBP does not cover

You cannot use HBP funds to buy a home you have already owned and used as your principal residence, unless you have repaid the full prior HBP balance and re-qualified as a first-time buyer.
The withdrawal must fund the purchase or construction of the home — it cannot be used for renovations on an existing home you already own.
The home must be in Canada.
If you do not ultimately buy a home (for example, a purchase falls through and you do not complete another qualifying purchase by October 1 of the following year), the withdrawn amount may be required to be repaid or included in income for that year.

HBP vs. FHSA: which should you use first?

If you have both available, use the FHSA first because:

No repayment obligation (money is yours, tax-free)
Tax deduction on contribution and tax-free withdrawal — better overall tax efficiency than HBP
Using the FHSA does not limit your HBP access; both can be combined

The HBP is best used to top up a down payment when FHSA room is exhausted, particularly for buyers who have substantial RRSP savings built up over years of working.

Practical checklist

[ ] Confirm you meet the first-time buyer test (no principal residence occupied in the current or prior 4 years)
[ ] Ensure the RRSP funds you plan to withdraw have been in the account for at least 90 days
[ ] File Form T1036 with your financial institution before or at the time of withdrawal
[ ] Keep a copy of your purchase agreement (required documentation for the HBP withdrawal)
[ ] Know your repayment start year (2 years out, or 5 if you qualify for the extended grace period)
[ ] Track repayments on Schedule 7 of your annual T1 return

Frequently asked questions

What is the current Home Buyers' Plan withdrawal limit?

$60,000 per person, raised from $35,000 by Budget 2024. This higher limit applies to withdrawals made on or after April 16, 2024. A qualifying couple can each withdraw $60,000 for a combined $120,000.

Do I have to repay the HBP withdrawal?

Yes. Unlike the FHSA, the HBP withdrawal must be repaid to your RRSP over 15 years (1/15th per year). If you miss a payment, that amount is included in your taxable income for the year. There is no interest charged, but there is an income tax consequence for under-repayment.

When does HBP repayment start?

Normally the second calendar year after the year of your first withdrawal. For withdrawals between January 1, 2022 and December 31, 2025 (and for first withdrawals between January 1, 2026 and December 31, 2028 per the 2026 Spring Economic Statement), the grace period is extended to 5 years under Budget 2024.

Can I use the HBP more than once?

Yes — but only after you have fully repaid a prior HBP balance and have not owned or occupied a principal residence in the four years preceding the new withdrawal. The first-time buyer test applies each time.

Can I use both the HBP and the FHSA?

Yes. Both can be used toward the same qualifying first-home purchase. They are additive, not alternative. See the First-Time Home Buyer Guide for how they work together.

What is the RRSP 90-day rule?

RRSP funds must have been in the account for at least 90 days before the HBP withdrawal to qualify. Contributions made within 90 days of withdrawal do not count toward the HBP amount.