Last updated: February 6, 2023

What is the Home Buyers’ Plan (HBP)?

The Home Buyers’ Plan (HBP) is a government program that lets Canadian residents withdraw up to $35,000 from their RRSP to buy or build their first home.

Couples (legally married or common-law) can withdraw up to $35,000 each, for a total of $70,000 towards the same home purchase. When you withdraw this amount, it’s like you’re borrowing from your RRSP.

Who qualifies as a first-time home buyer in Canada?

To qualify as a first-time home buyer, neither you nor your current spouse or common-law partner can have owned a home in the four-year period leading up to the withdrawal. However, you don’t have to meet this requirement if you have a disability or if you’re making a withdrawal under the HBP for a relative with a disability. See the Canada Revenue Agency (CRA)’s persons with disabilities guidelines for more information.

Other conditions may also apply, such as:

  • You must be a resident of Canada throughout the period that starts when you make your first eligible withdrawal from your RRSPs under the HBP and ends when you buy or build a qualifying home.
  • You must live in the home as your primary residence within one year of owning it.
  • Neither you nor your spouse nor common-law partner can buy the home more than 30 days before the withdrawal.

For a complete list of requirements, please consult the Government of Canada’s guidelines on the HBP.

What are the Home Buyers Plan repayment rules?

You must repay withdrawals made under the HBP within a 15-year period, otherwise, taxes will apply. You don’t have to pay income taxes on the money you take out of your RRSP if you make HBP repayments within the specified timeframe. You can make repayments to any of your RRSPs, a Pooled Registered Pension Plan (PRPP) or a Specified Pension Plan (SPP) within that 15-year period.

The 15-year repayment period begins two years after the calendar year in which you make the withdrawal. For example, let’s say you pull money out in 2024. In this case, you’ll have to start making repayments by the end of 2026 or within the first 60 days of 2027. If you don’t make the minimum repayment, you’ll have to include the portion of the amount you didn’t repay as income on your tax return.

What other options do you have when buying a home?

If you’ve saved money in a tax-free savings account (TFSA), you can choose to use that money towards your new home instead of withdrawing from your RRSP under the HBP. Or you can use your TFSA in combination with your HBP withdrawals to buy or build a home.

You can also combine HBP withdrawals with withdrawals from your First Home Savings Account (FHSA) for the same qualifying home.

Connect with an advisor to find out which options are right for you

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Frequently asked questions

Can I repay the Home Buyers’ Plan early?

Yes, you can repay the HBP back early. But even if you choose to start repaying it earlier than required, it doesn’t reduce your repayment timeframe. You’ll still have to repay the full amount within 15 years. Please consult with a qualified tax advisor to find out if early HBP repayment meets your financial needs.

What happens if you don’t pay back your HBP?

You’ll be taking a tax hit on the amount you didn’t repay as required in that year. The amount of tax you’ll have to pay depends on your annual HBP repayment amount or the shortfall in making that annual repayment and your tax bracket for that year.

Can I use the Home Buyers’ Plan more than once?

Yes, you can use the HBP more than once if you’ve repaid your previous HBP and your balance is at 0. If you’re separated, divorced, or no longer living with your spouse or common-law partner, you also need to meet all the other HBP conditions that apply to your situation. Connect with an advisor to discuss your unique situation.

Can I cancel the Home Buyers’ Plan if I don’t buy a house?

Yes, in certain situations, you can cancel your participation in the HBP. For example, you can cancel your HBP if you didn’t buy a home or if you become a non-resident of Canada before buying a home.

You’ll have to notify the CRA of your intention to cancel and repay the amount. Any portion of your withdrawal that isn’t repaid will have to be included as income in your income tax return. Connect with an advisor for more detailed information.

Can both spouses use the Home Buyers’ Plan?

Yes, each spouse can withdraw up to $35,000 from their RRSP – making a total of $70,000. This is provided all conditions are met under the HBP. Two years after buying a home, each spouse must start making HBP repayments within a specified timeframe. Connect with an advisor for more detailed information.

How do I check the balance on my Home Buyers’ Plan?

The CRA will send you a statement with the total amount you currently owe, as well as the minimum payment due.

You’ll also see your HBP account balance on your Notice of Assessment, as well as on your CRA MyAccount information. Additionally, you can contact the CRA to make inquiries about your HBP balance.

Additional resources

You can use both the FHSA and the HBP to purchase a new home.

Buying your first home and considering an FHSA?