Home Buyers' Plan: RRSP Withdrawal for First-Time Home Buyers

WOWA® Simply Know Your Options

The Home Buyers' Plan (HBP) allows eligible individuals to withdraw up to $60,000 from their RRSP savings to buy or build a qualifying home for themselves or for a related person with a disability. Eligible withdrawals are not subject to immediate withholding tax and are not included in taxable income when withdrawn.

You generally have up to 15 years to repay the amount. Repayments normally begin in the second calendar year after the year of your first withdrawal. However, if your first HBP withdrawal was made between January 1, 2022, and December 31, 2025, your repayment period begins in the fifth calendar year after the withdrawal year.

After fully repaying your HBP balance, you may use the program again if you continue to meet all eligibility requirements. You can also combine the HBP with the First Home Savings Account (FHSA) when purchasing your primary residence.

Home Buyers' Plan Interest Savings Calculator

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HBP Amount Withdrawn:

$

Results

Total Mortgage Interest Savings:

$44,689

If you borrow $60,000 using a Home Buyers' Plan, you could save $44,689 over a 25-year mortgage at 5% interest with monthly payments.

This estimate assumes the full HBP withdrawal reduces the amount you would otherwise borrow. It does not account for HBP repayments, lost RRSP investment growth, changes in mortgage rates or mortgage default insurance premiums.

Before choosing to use the Home Buyers' Plan, you should consider if using savings held in a Tax-Free Savings Account (TFSA) would be more ideal. You can withdraw funds from a TFSA tax-free at any time. The amount withdrawn is added back to your TFSA contribution room at the beginning of the following calendar year. Re-contributing it earlier could cause an overcontribution unless you already have sufficient unused room.

To participate in the Home Buyers' Plan, you must generally meet all of the following conditions:

• You must qualify as a first-time home buyer, unless an exception applies.
• You must have a written agreement to buy or build a qualifying home in Canada for yourself.
• You must be a resident of Canada when you make the HBP withdrawal and remain a resident until you buy or build the home.
• You must intend to occupy the home as your principal residence within one year after buying or building it.
• Any balance from a previous HBP participation must be zero on January 1 of the year you make the new withdrawal.

Different rules may apply when buying or building a home for a specified disabled person or following the breakdown of a marriage or common-law partnership.

For HBP purposes, you are generally considered a first-time home buyer if you did not live in a home as your principal residence that you or your current spouse or common-law partner owned or jointly owned:

• At any time during the four preceding calendar years; or
• During the current calendar year before the withdrawal, excluding the 30 days immediately before the withdrawal.

For example, owning a rental property that you have not occupied as your principal residence does not necessarily prevent you from qualifying as a first-time home buyer.

Before making a withdrawal, confirm that you meet all Home Buyers' Plan eligibility requirements. You must qualify as a first-time home buyer, be a resident of Canada, and have a written agreement to buy or build a qualifying home in Canada. Different rules may apply when participating for a specified disabled person or following the breakdown of a marriage or common-law partnership.

To withdraw money from your RRSP under the Home Buyers' Plan, complete Form T1036, Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP. You must complete a separate form for each withdrawal.

You complete Area 1 of the form and give it to your RRSP issuer, which completes Area 2 and processes the withdrawal.

You may make multiple HBP withdrawals:

• During the same calendar year as your first withdrawal; and
• In January of the following calendar year.

Your total HBP withdrawals cannot exceed $60,000. Eligible withdrawals of up to $60,000 are not subject to withholding tax and are not included in your taxable income. Any amount withdrawn above the limit must generally be reported as RRSP income, and your financial institution must withhold tax on the excess amount.

Some locked-in or group RRSPs may not permit HBP withdrawals, so you should confirm your account's withdrawal rules with your RRSP issuer.

RRSP contributions made during the 89 days before a Home Buyers' Plan withdrawal may not be fully tax-deductible.

Generally, the non-deductible amount is calculated as:

Contributions made during the 89-day period − the value remaining in the RRSP immediately after the withdrawal. The calculation is performed separately for each RRSP from which a withdrawal is made.

For example, suppose your RRSP has a balance of $10,000, and you contribute another $5,000. If you withdraw $10,000 under the HBP within 89 days, $5,000 remains in the RRSP, so the full $5,000 contribution may still be deductible.

However, if you withdraw the entire $15,000 within 89 days, nothing remains in the RRSP. As a result, the recent $5,000 contribution would generally not be deductible.

If you wait at least 90 days after making the contribution before withdrawing the funds, the 89-day rule generally does not apply.

You must generally buy or build the qualifying home before October 1 of the calendar year following the year of your first HBP withdrawal.

For example, if you make your first withdrawal in 2026, you must generally buy or build the home before October 1, 2027.

If you do not meet this deadline and no exception applies, the withdrawal may no longer qualify under the HBP. You may have to cancel your participation by returning the funds to an RRSP within the applicable deadline. Any amount that is not returned may be included in your taxable income, and the associated RRSP contribution room is not restored.

You may receive an additional year to buy or build the home if your original agreement is cancelled and you have a new written agreement to acquire or build a replacement property by October 1 of the year following your first withdrawal.

Under this extension, you must generally acquire or complete the replacement home before October 1 of the second calendar year following the withdrawal year.

For example, if you first withdrew funds in 2026, the normal deadline would be October 1, 2027. If you qualify for the extension, the deadline would generally become October 1, 2028.

You may also qualify for the extension when building a home if, by the normal October 1 deadline, you have paid construction expenses at least equal to the total amount withdrawn under the HBP.

You generally cannot cancel your HBP participation simply because you change your mind. However, cancellation may be allowed if you do not buy or build a qualifying home or if you become a non-resident of Canada before buying or building the home.

To cancel, you must generally return the withdrawn amount to your RRSP by the applicable deadline and submit Form RC471, along with the required supporting documents, to the CRA. Any amount you do not return may have to be included in your taxable income.

Different deadlines may apply if you qualified for the one-year extension to buy or build a replacement home.

The Home Buyers' Plan may be used to buy or build a qualifying home for yourself or for a specified disabled person. You may be eligible to withdraw funds from your RRSP when:

• You are a specified disabled person buying or building a home for yourself.
• You are buying or building a home for a specified disabled person who is related to you.
• You are helping a specified disabled person who is related to you buy or build a home.

The home must be more accessible or better suited to the disabled person's needs and care. All applicable HBP conditions must also be met for the withdrawal to qualify. A specified disabled person is generally someone entitled to the disability tax credit for the year of the HBP withdrawal.

You have up to 15 years to repay an amount withdrawn under the Home Buyers' Plan. Under the regular rules, your repayment period begins in the second year after the year of your first withdrawal.

For example, if you make your first HBP withdrawal in 2026, your first required repayment will be for the 2028 tax year. If you use the full 15-year repayment period, your final repayment will be for the 2042 tax year.

People who made their first HBP withdrawal from 2022 through 2025 received temporary repayment relief. For these participants, repayments begin in the fifth year after the withdrawal year instead.

Each year, the Canada Revenue Agency (CRA) includes an HBP statement of account with your notice of assessment or reassessment. The statement shows:

• The repayments you have made
• Your remaining HBP balance
• Your minimum required repayment for the following year

You may begin repaying your HBP before your first required repayment year. Early repayments reduce your outstanding HBP balance and may lower your required repayments in later years.

To count as an HBP repayment, an eligible RRSP contribution must be designated as a repayment on your income tax return. You cannot claim a tax deduction for the amount designated as an HBP repayment.

Home Buyers' Plan Repayment Calculator

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HBP Amount:

$

Year of First HBP Withdrawal:

Results

Annual Repayment Amount:

$4,000

First Repayment Year:

2028

If you withdraw $60,000 using a Home Buyers' Plan in 2026, your repayment period will normally begin in 2028, and your initial minimum repayment would be $4,000. Future minimum repayments change if you repay more than the required amount.

Home Buyers' Plan repayments are made by contributing to your own RRSP, pooled registered pension plan (PRPP), or specified pension plan (SPP). You must then designate all or part of the contribution as an HBP repayment on Schedule 7 of your income tax and benefit return. Contributions are not automatically treated as HBP repayments.

You can use an eligible contribution made at any time during the repayment year or during the first 60 days of the following year. However, a contribution made during the first 60 days of the repayment year cannot be used if you already deducted it or designated it as an HBP or LLP repayment for the previous year.

You may designate all or only part of an eligible contribution as an HBP repayment. However, you cannot designate:

• A contribution made to your spouse's or common-law partner's RRSP
• A transfer from one registered plan to another
• Certain other amounts that were not eligible contributions to your own RRSP, PRPP, or SPP

An amount designated as an HBP repayment does not use your available RRSP contribution room. You can make an HBP repayment even if your RRSP deduction limit is zero.

However, you cannot claim an income tax deduction for the amount designated as an HBP repayment. The contribution is restoring money previously withdrawn from your RRSP rather than creating a new deductible contribution.

For example, if you have $10,000 of available RRSP contribution room and contribute $2,000 to your RRSP as an HBP repayment, you will still have $10,000 of available contribution room. The $2,000 repayment cannot be deducted from your taxable income.

If you repay less than the minimum required amount, the shortfall is included in your taxable income for that year. It is reported as RRSP income on line 12900 of your tax return.

You will pay income tax on the shortfall based on your marginal tax rate. The amount is also deducted from your outstanding HBP balance, so you do not have to repay it later. However, you permanently lose the RRSP contribution room associated with that amount.

This is not technically a separate penalty. It is the tax consequence of failing to make and designate the required repayment.

You must file an income tax and benefit return every year, beginning with the year of your first HBP withdrawal, even if you do not owe tax or have declared bankruptcy.

Complete and submit Schedule 7, RRSP, PRPP and SPP Contributions and Transfers, and HBP and LLP Activities, with your tax return:

• In the year of your first HBP withdrawal, complete the applicable HBP withdrawal section, currently Part E.
• In the year after your first withdrawal and in every subsequent year until your HBP balance is eliminated, complete the applicable HBP repayment section, currently Part B.

The CRA uses this information to update your HBP balance and calculate your minimum repayment for the following year. Check the Schedule 7 instructions for the relevant tax year, as section names or line numbers may change.

The Home Buyers' Plan allows eligible home buyers to withdraw funds from their RRSP for a down payment without immediate tax. Because RRSP contributions are generally tax-deductible, an RRSP may allow you to put more of the same gross income toward your down payment. This works most directly when contributions are deducted through payroll. When you contribute from your bank account, you normally receive the tax benefit later through reduced taxes or a tax refund.

The advantage depends on your marginal tax rate. At a 30% marginal tax rate, $5,000 of pre-tax income would leave approximately $3,500 after tax if deposited into a traditional savings account. If the full $5,000 is contributed to an RRSP, the contribution may reduce your taxable income, subject to your available RRSP deduction room.

Assume you set aside $5,000 of pre-tax income each year and have a 30% marginal tax rate:

• In a traditional savings account, you would save approximately $3,500 per year after tax, reaching $17,500 after five years.
• In an RRSP, you could contribute the full $5,000 each year, reaching $25,000 after five years, before accounting for investment returns.

Under these assumptions, the RRSP balance would be $7,500 higher after five years. This assumes the full tax benefit is contributed or retained for the down payment. Investment returns could increase or decrease the difference. This example does not account for investment performance, taxes on non-registered investment income, fees, or the effect of withdrawing funds from the RRSP.

RRSP vs. Regular Savings Using the Same Gross Income at a 30% Marginal Tax Rate

This will depend on how fast your RRSP Issuer can liquidate and process the money in your RRSP account. Typically, it will take around 5 to 7 business days.

As long as you meet the requirements of the HBP and don't withdraw more than $60,000, you do not have to worry about any penalties. If you do not meet the conditions or exceed the limit, the ineligible amount will be treated as RRSP income on your tax return and taxed according to your tax bracket. You may also be subject to withholding taxes.

To make full use of the Home Buyers' Plan, you would need at least $60,000 available in your RRSP before making the withdrawal. Regular RRSP contributions can help you build this amount while reducing your taxable income, provided you have sufficient RRSP deduction room.

The benefit depends on your marginal tax rate. For example, a $10,000 RRSP contribution at a 35% marginal tax rate could reduce income tax by approximately $3,500. Reinvesting those tax savings in your RRSP can help you build a larger down payment more quickly.

Keep in mind that contributions made within the 89 days before an HBP withdrawal may not be fully deductible, and amounts withdrawn under the HBP generally must be repaid to your RRSP over time.

Yes, each individual can use the Home Buyers' Plan and take out up to $60,000 from their own RRSP as long as they meet the eligibility conditions of the HBP. These include being a first-time home buyer and a resident of Canada.

Yes, you can use Home Buyers’ Plan withdrawals to cover closing costs or even to buy furniture. It is up to you how you choose to use it.

Yes. You can use the Home Buyers' Plan more than once if:

• You qualify as a first-time home buyer again under the HBP rules; and
• Your balance from any previous HBP participation is zero on January 1 of the year you make the new withdrawal.

For HBP purposes, qualifying again generally means that during the applicable period, you did not live as your principal residence in a home owned or jointly owned by you or your current spouse or common-law partner.

You can if you qualify as a first-time home buyer. You will be considered as a first-time home buyer as long as you have not occupied a home owned by you or your spouse during the four year period which lasts from January 1st four years prior to 31 days before the day you withdraw the fund. For example, if you sold your home in 2014 and have not resided in a home that you or your spouse owned for the next few years, you can participate in the HBP again in 2019.

You can, but this is not necessarily a good strategy. Your withdrawal will be taxed as RRSP income at your marginal tax rate and you will not be able to re-contribute your withdrawal to your RRSP.

If you're buying a home, you can withdraw from your RRSP through the Home Buyers' Plan and use the money towards your down payment. This will effectively reduce your mortgage borrowing and will not come with the penalties of an RRSP withdrawal.

Except for money that is withdrawn for the Home Buyers’ Plan (HBP) or the Lifelong Learning Plan (LLP) under eligible circumstances, all other money withdrawn from your RRSP early will be subject to taxation. The taxation is split into two parts: a withholding tax and an income tax.

Withholding taxes are taxed immediately on withdrawal and are set at:

• 10% on amounts under $5,000 (or 5% in Quebec)
• 20% on amounts between $5,000 and $15,000 (or 10% in Quebec)
• 30% on amounts over $15,000 (or 15% in Quebec)

You will also have to pay an income tax on the amount you withdrew. If your marginal tax rate is higher than the withholding tax rate, you will have to pay the additional income tax at the end of the year. However, if your marginal tax rate is lower than the withholding tax (which is very unlikely unless you have no other income), you may get part or all of your withholding tax refunded.

Any withdrawals from an RRSP not under the Home Buyers' Plan or Lifelong Learning Plan will be subject to income tax. Subsequently, it is best to withdraw when you have little income as your marginal tax rate will be low. If you think that your income is currently lower than it will be during retirement, you can withdraw early to minimize your income tax.