RRSP Home Buyers’ Plan

1.  What is the Home Buyers’ Plan?

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. The withdrawal amount will not be included in your income, and income tax will not be deducted from the amount withdrawn.


2.  What is the advantage of RRSP Home Buyers’ Plan?

The Home Buyers’ Plan allows you to withdraw up to $25,000 tax free from your RRSP to put towards your first home. So if you use your RRSP’s as a down payment may be a great option as you have the ability to draw from some of your existing resources and it might possibly allow you to accumulate the 20% down payment needed to avoid having to pay default insurance premiums.


3.  What are the eligibility conditions for the Home Buyers’ Plan?

  • RRSP funds you borrow must be in your account for at least 90 days prior to withdrawal.
  • You cannot have owned a home within the previous 4 years.
  • If you’re buying with a spouse who is not a first time homebuyer, you cannot have lived in a house they owned for 4 years.
  • You must provide a signed agreement to buy or build a qualifying home.
  • You must intend to live in the home within one year of purchase as your primary residence.
  • If you have used the Home Buyers’ Plan before, you cannot have any outstanding balance due.
  • You must make the withdrawal from your RRSP within 30 days of taking title of the home.
  • You must be a Canadian resident.


4.  What are the withdrawal conditions for RRSP?

  • You have to receive or be considered to have received, all withdrawals in the same calendar year.
  • You can withdraw funds from more than one RRSP as long as you are the owner of each RRSP.
  • You will not normally be allowed to withdraw funds from a locked-in RRSP or a group RRSP.
  • Your RRSP contributions must stay in the RRSP for at least 90 days before you can withdraw them under the HBP.
  • You buy or build the qualifying home for can own the qualifying home more than 30 days before the withdrawal is made.
  • You have to buy or build a qualifying home before October 1st of the year after the year of the withdrawal.
  • You have to fill out Form T1036, HBP Request to Withdraw Funds from an RRSP.


5.  When do buyers need to pay back the Home Buyers’ Plan?

You must pay back the amount you withdrew from your RRSP within 15 years since the Home Buyers’ Plan is considered a loan. The government gives you two full calendar years before you need to start paying back your Home Buyers’ Plan.

Canada Revenue Agency will send you a Notice of Assessment, which will indicate the amount of the loan you have repaid, the balance left to be repaid, and the amount of your next payment. To start repaying the loan, you must make a contribution to your RRSP in the year the repayment is due or in the first 60 days of the following year.


Canada. Revenue. Canada Revenue Agency. 26 Oct. 2016. Web. 2 Aug. 2017. <http://www.cra-arc.gc.ca/hbp/>.

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