Last updated: August 6, 2024
What is the Home Buyers’ Plan (HBP)?
The Home Buyers’ Plan (HBP) is a government program that lets Canadian residents withdraw up to $60,000 from their registered retirement savings plan (RRSP) to buy or build their first home.
Couples (legally married or common-law) can withdraw up to $60,000 each, for a total of $120,000 towards the same home purchase. When you withdraw this amount, it’s like you’re borrowing from your RRSP.
The increased withdrawal limit applies to all withdrawals made after April 16, 2024.
Who qualifies as a first-time home buyer in Canada?
To participate in the HBP, you must be considered a first-time home buyer. This means that, neither you nor your spouse or common-law partner can have owned a home in the current calendar year (except the 30 days immediately before the withdrawal) or 4 calendar years before you withdraw money from your RRSP.
Example
Say you take out money from your RRSP for a down payment on July 31, 2024. In that case, you and your spouse or common-law partner cannot have owned or jointly owned a home between January 1, 2020, and June 30, 2024. If either of you lived in a home that you or your spouse owned during that period, you would not qualify as a first-time home buyer.
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?
Once your repayment period begins, you have up to 15 years to pay back the money you withdrew from your RRSP under the HBP.
If you made your first withdrawal between January 1, 2022, and December 31, 2025
You don’t need to start paying it back for 5 years after your first withdrawal. For example, if you first took money out in 2022, you need to start making repayments by the end of 2027 or in the first 60 days of 2028.
If you made your first withdrawal before January 1, 2022
You needed to start repaying in the second year after your first withdrawal. For example, if you first withdrew money in 2021, you had to start repaying in 2023.
To avoid paying taxes on the withdrawn amount, you must repay the minimum repayment amount or more each year over the 15 years. If you miss the minimum repayment in any year, you will owe tax on the amount you didn’t repay in that year.
You can make the repayments to any of your RRSPs, Pooled Registered Pension Plan (PRPP), or Specified Pension Plan (SPP) during the 15-year repayment period.
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
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 over 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. You can use the HBP again if you’ve repaid your previous HBP, your balance is at $0, and you qualify as a first-time home buyer under the rules.
If you’re separated, divorced, or no longer living with your spouse or common-law partner, different HBP conditions may apply to your 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.
Can both spouses use the Home Buyers’ Plan?
Yes, each spouse can withdraw up to $60,000 from their RRSP – making a total of $120,000. This is provided all conditions are met under the HBP.
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.
More resources
You can use both the FHSA and the HBP to purchase a new home.
This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.