The Home Buyers’ Plan (HBP) allows first-time home buyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to use as a down payment on a qualifying home, without triggering immediate income tax on the withdrawal. The withdrawn amount must be repaid to the RRSP over 15 years, starting the second calendar year after the year of withdrawal. Amounts not repaid in a given year are added to the borrower’s income for that year and taxed accordingly.
The $60,000 limit (per person) was set by the 2024 federal budget, effective April 16, 2024. For qualifying purchases before that date, the prior $35,000 limit applied. Each spouse or common-law partner in a couple may participate separately, allowing up to $120,000 combined from two RRSPs for a joint purchase.
Quick Answer
Withdraw up to $60,000 from your RRSP for a first home purchase. The withdrawal is tax-free at the time, but you must repay it in 15 equal annual instalments ($4,000/year for a $60,000 withdrawal), starting the second year after withdrawal. If you miss a year’s repayment, that year’s minimum ($4,000) is included in your taxable income.
How the HBP Works
- Confirm eligibility: you must be considered a first-time buyer (you and your spouse or common-law partner have not owned a home that was your principal residence in the current calendar year or in any of the four preceding calendar years).
- The qualifying home must be purchased or built before October 1 of the year following the RRSP withdrawal.
- The RRSP funds must have been in the account for at least 90 days before withdrawal; funds contributed in the preceding 90 days do not qualify.
- Complete CRA Form T1036 (Home Buyers’ Plan Request to Withdraw Funds from an RRSP) before the withdrawal.
- The RRSP issuer processes the withdrawal without withholding tax once the T1036 is submitted.
Repayment Rules
The minimum annual repayment is total HBP balance divided by 15. For a $60,000 withdrawal: $60,000 / 15 = $4,000/year.
Repayment starts the second calendar year after the year of first withdrawal. If you withdrew in 2025, your first repayment year is 2027 and the last is 2041.
Designate repayments on Schedule 7 of your T1 return. Repayments are contributions to your RRSP, subject to your available RRSP contribution room. If you have no RRSP room, contact CRA to determine alternative arrangements.
You can make extra repayments at any time to reduce the outstanding balance faster. Early repayments reduce both the outstanding HBP balance and future minimum annual repayments proportionally.
Worked Example: $60,000 Withdrawal
A 32-year-old withdraws $60,000 from their RRSP in March 2025. They purchase a home in August 2025.
- Repayment starts: 2027
- Annual minimum repayment: $4,000
- Final repayment year: 2041
- Total repaid: $60,000
- Years from withdrawal to full repayment: 16 (1 withdrawal year + 1 grace year + 15 repayment years)
If the taxpayer misses the 2030 repayment of $4,000, that $4,000 is added to their 2030 taxable income. If they are in the 26% federal + 11.16% Ontario bracket, the missed repayment costs approximately $1,490 in extra tax.
Opportunity Cost
The HBP is not truly a “free” use of RRSP funds. By removing money from the RRSP, future investment returns are foregone. At a 6% average annual return, $60,000 left in the RRSP for 17 years would grow to approximately $161,500. The $60,000 RRSP withdrawal and 15-year repayment schedule means you are paying back the same nominal dollars but losing the compounding growth on those funds during the repayment period. The opportunity cost calculator panel shows this comparison.
Disability Provision
If a person with a disability (or a related person with a disability) needs a more accessible or functional home, the first-time buyer requirement can be waived. They may use the HBP even if they previously owned a home, subject to other qualification rules.
HBP vs. FHSA
The First Home Savings Account (FHSA), introduced in 2023, is an alternative that provides both an upfront deduction and tax-free withdrawal for a first home, without any repayment obligation. FHSA and HBP can be combined on the same home purchase, subject to the individual limits of each program ($40,000 FHSA lifetime contribution room, $60,000 HBP). FHSA funds withdrawn for a home purchase are not added to HBP balance and do not reduce HBP room.
Edge Cases and Rules
- If the qualifying home is not purchased by October 1 of the year following withdrawal, the entire amount must be included in income in the year of withdrawal.
- HBP balance is not prorated on death; the full outstanding balance is included in the deceased’s income in the year of death unless a qualifying rollover to a surviving spouse occurs.
- Spousal RRSP funds can be withdrawn under the HBP by the annuitant (not the contributor) provided the contributor and annuitant both qualify. Attribution rules for spousal RRSPs apply differently to HBP withdrawals than to regular withdrawals.
- The HBP balance cannot be transferred to a TFSA, FHSA, or other registered account. Repayments must go to an RRSP in the taxpayer’s own name.
Frequently asked questions
- How much can I withdraw under the Home Buyers' Plan?
- As of April 16, 2024, the HBP limit is $60,000 per person. Each spouse or common-law partner in a qualifying couple may separately withdraw up to $60,000, allowing up to $120,000 combined for a joint purchase.
- Do I pay tax on an HBP withdrawal?
- No tax is withheld or owing at the time of withdrawal, provided the T1036 form is submitted to the RRSP issuer before the withdrawal. However, if the withdrawn amount is not fully repaid over the 15-year schedule, the unrepaid annual minimum is added to your taxable income in that year.
- When must I start repaying the HBP?
- Repayments must start the second calendar year after the year of first withdrawal. If you withdrew in 2025, repayments begin in 2027 and continue for 15 years, ending in 2041.
- How is the annual HBP repayment calculated?
- The minimum annual repayment is the total outstanding HBP balance divided by the number of years remaining in the 15-year repayment schedule. For a $60,000 withdrawal with the standard schedule, this is $4,000 per year ($60,000 / 15).
- What happens if I miss an HBP repayment?
- If you do not make the minimum annual repayment and do not designate it on Schedule 7, the missed repayment amount is added to your taxable income for that year. At a 26% marginal federal rate, a missed $4,000 repayment costs roughly $1,040 in additional federal tax.
- Can I make extra HBP repayments?
- Yes. You can repay more than the annual minimum at any time. Extra repayments go to your RRSP account, reduce your outstanding HBP balance, and reduce the future annual minimums proportionally. You still need RRSP contribution room to make repayments.
- Does the 90-day holding period apply to HBP withdrawals?
- Yes. RRSP contributions made within 90 days before the HBP withdrawal are not eligible for withdrawal under the HBP. These recently contributed funds must remain in the RRSP. Only funds that have been in the account for at least 90 days are eligible.
- Can I use HBP and FHSA together?
- Yes. Both programs can be used for the same qualifying home purchase. FHSA provides a tax-free withdrawal (no repayment) on up to $40,000 of lifetime contributions. HBP allows up to $60,000 from an RRSP (with a 15-year repayment requirement). Using both gives a first-time buyer access to up to $100,000 in registered savings without immediate tax.
- What qualifies as a first-time buyer for the HBP?
- You are considered a first-time buyer for HBP purposes if neither you nor your spouse/common-law partner owned a home that was your principal residence at any point in the current calendar year or the four preceding years. This is a rolling four-year look-back, not a lifetime restriction.
- What if my home purchase falls through after the HBP withdrawal?
- If the qualifying home is not acquired or built by October 1 of the year following the withdrawal, the full withdrawn amount must be included in your income for the year of withdrawal and taxed accordingly. You can avoid this by repaying the full amount to your RRSP before the deadline.
- Can a person with a disability use the HBP without being a first-time buyer?
- Yes. If you or a related person with a disability acquires a home to meet a functional need (for example, wheelchair accessibility), the first-time buyer requirement can be waived. The other HBP conditions — RRSP holding period, qualifying home definition, repayment schedule — still apply.