Overview
The RRSP Home Buyers’ Plan (HBP) lets first-time homebuyers withdraw up to $35,000 per person (or $70,000 per couple) from their Registered Retirement Savings Plan to buy or build a qualifying first home — without triggering any immediate tax. You then repay the withdrawal back into your RRSP over up to 15 years, interest-free from CRA’s perspective.
This is one of the most underused government programs in Canada. It effectively lets you redirect retirement savings toward your down payment and then rebuild them over time.
Key Rules
| Feature | Details |
|---|---|
| Maximum withdrawal | $35,000 per person ($70,000 per couple) |
| Repayment period | 15 years, starting the 2nd year after withdrawal |
| Annual repayment | At least 1/15th of the total withdrawn |
| Consequence of not repaying | The missed repayment amount is added to your income for that year |
| RRSP funds must be on deposit | At least 90 days before withdrawal |
Do I Qualify?
- You have not owned a home you lived in at any point during the 4 calendar years before the year of withdrawal, nor in the year of withdrawal up to the date of the HBP request (or you are a separated/divorced individual buying a home for yourself after living apart from your spouse for at least 90 days)
- You have RRSP funds that have been on deposit for at least 90 days before withdrawal
- You have a written agreement to buy or build a qualifying home in Canada
- The home will be your principal place of residence within one year of buying or building
You can re-qualify if you previously owned a home but have not lived in one you owned for over 4 years. Divorced or separated individuals may also re-qualify under special rules.
How to Use It
Step 1 — Contribute to your RRSP. Funds must sit in the RRSP for at least 90 days before withdrawal — you can’t contribute and withdraw immediately. Planning ahead is essential.
Step 2 — Find a qualifying home. Must be a Canadian residential property that will be your principal place of residence within one year of buying or building.
Step 3 — Withdraw using Form T1036. Submit this form to your RRSP provider. They will process the withdrawal without withholding tax. You can make multiple withdrawals in the same calendar year, as long as the total doesn’t exceed $35,000.
Step 4 — File your taxes. Report the HBP withdrawal on Schedule 7 of your T1 return. CRA will track your outstanding HBP balance.
Step 5 — Begin repaying in year 2. Starting the second calendar year after the year of your first withdrawal, you must repay at least 1/15th of the total amount annually. Make an RRSP contribution and designate it as an HBP repayment on Schedule 7.
What Most People Don’t Know
- You can combine the HBP with the First Home Savings Account (FHSA), which allows contributions of $8,000/year (up to $40,000 lifetime) with immediate tax deductions and tax-free withdrawals for a first home. Using both in the same purchase is powerful.
- The 90-day rule is strict. Funds transferred in from another RRSP must also wait 90 days. Plan well in advance.
- Repayments don’t generate new contribution room — when you designate an RRSP contribution as an HBP repayment, it doesn’t count against your annual RRSP contribution limit. It simply reduces your outstanding HBP balance.
- If you miss a repayment year, the missed amount is added to your taxable income — it’s not a fine, but it becomes taxable as if you withdrew it from your RRSP normally.
- Spousal RRSPs count. You can withdraw from a spousal RRSP for the HBP, subject to the attribution rules (the spousal RRSP must not have had contributions in the current year or the two preceding years, otherwise attribution rules apply to the income — check with a tax advisor).
- FHSA is generally preferable for new savers because withdrawals are permanently tax-free with no repayment required. HBP is better if you already have substantial RRSP savings you want to deploy.
Frequently Asked Questions
What happens if I contribute money to my RRSP and withdraw it under the HBP before 90 days have passed?
If the funds have not been on deposit for at least 90 days before the withdrawal, those specific contributions may not be deductible for any year — you lose the RRSP deduction on them. The 90-day rule applies to each specific dollar withdrawn, not the overall account, so timing your contributions carefully is essential.
What happens if I miss a yearly HBP repayment?
If you do not make the minimum annual repayment (1/15th of the total amount withdrawn), the missed amount is added to your taxable income for that year. It is treated as though you withdrew that amount from your RRSP, so you pay income tax on it at your marginal rate — there is no separate fine, but the tax cost can be significant.
Can my spouse and I both use the HBP for the same home purchase?
Yes. Each spouse can withdraw up to $35,000 (or up to $60,000 under the 2024 HBP limit increase — confirm current limits with CRA) from their own separate RRSP for the same home purchase, for a combined maximum of up to $120,000+ between two buyers.
Do FHSA withdrawals count as HBP repayments?
No. FHSA withdrawals are completely separate from the HBP repayment obligation. You can use both accounts for the same purchase, but FHSA withdrawals are permanently tax-free with no repayment required, while HBP withdrawals must be repaid to your RRSP over 15 years.
Can I use the HBP a second time if I owned a home years ago?
Yes, if you have not owned a home that you lived in as your principal residence in the current year or the preceding four calendar years, you may re-qualify for the HBP. Additionally, separated or divorced individuals may qualify even if they currently own a home, provided they have been living separate from their spouse for at least 90 days and are buying a new home for themselves.