The Home Buyers Plan (HBP) Using RRSPs

By Odane Harding •  Updated: 09/22/22 •  6 min read

How Does The RRSP Home Buyers Plan (HBP) Work?

The Home Buyers Plan (HBP) enables first-time homebuyers to tax-free withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSPs) to purchase their first house.

First-time homebuyers who have not owned a home in the last four years are eligible for the HBP.

The withdrawal must be made within 90 days you buy a home, and you must repay your RRSP within 15 years.

If you are no longer considered a first-time homebuyer, you can still participate in the HBP if you have experienced certain life events, such as divorce or the passing of a spouse or common-law partner.

The First-Time Home Buyers Plan Incentive Pros And Cons

The three types of accounts you may withdraw from your RRSP to put money towards your Home Buyers Plan program include a Registered Retirement Savings Account (RRSP), Pooled Registered Pension Plan (PRPP), or a Specified Pension Plan (SPP).



Who Qualifies For First-Time Home Buyer Incentive Plan In Canada?

Review the below eligibility requirements to determine if you may qualify for the First-Time Home Buyer Plan.

Home Buyers Plan – Incentive Eligibility Requirements

Home Buyers Plan – Incentive Eligibility Requirements For A Related Person With A Disability

Home Buyers Plan – Withdrawal Conditions Using RRSP/PRPP/SPP

Repayment Conditions

Canada Revenue Agency (CRA) provides you with a Home Buyers Plan statement of account every year, along with your notice of assessment or notice of reassessment.

The details in this statement will advise you on what you are expected to pay for that year.

Payments to pay back the amount withdrawn should be made continuously year-over-year until the total amount you have withdrawn (up to $35,000) has been repaid to your RRSP/PRPP/SPP.

Repayment Process

Payments on your first home start two years after you have initially withdrawn the tax-free money.

You may check your updated account balance of what you owe by logging in to your CRA Account or on the MyCRA Account App.

What Happens If You Don’t Pay Back The Home Buyers Plan?

If you’ve taken out the Home Buyers Plan to help with your down payment, you must repay it within 15 years.

If you don’t make a repayment, the amount will be added to your tax bill for that year. The Canada Revenue Agency (CRA) will charge interest on the unpaid amount.

The good news is that you can usually arrange to make smaller monthly payments instead of one lump sum.

1Canada Revenue AgencyWhat is the Home Buyers Plan (HBP)?
2CRA - Withdrawal FormsT1036 Home Buyers Plan (HBP) Request to Withdraw Funds from an RRSP
3CRA - Withdrawal Forms5000-S7 Schedule 7 - RRSP, PRPP and SPP Unused Contributions, Transfers, and HBP or LLP Activities (for all)
4CRA - Withdrawal Cancellation FormForm RC471, Home Buyers Plan (HBP) Cancellation
5CRA - How To Cancel HBP ParticipationHow to cancel participation in the Home Buyers Plan (HBP)
6CRA My AccountCRA My Account
7CRA MyCRA Mobile AppCRA MyCRA Mobile App

Odane Harding

Odane Harding is a Toronto Real Estate Agent who specializes in helping new buyers and sellers of homes. With over 6 years of experience in the industry, Odane brings his knowledge and expertise to each client, ensuring they have a smooth transaction. His passion for helping people and his dedication to providing excellent service makes him stand out amongst other agents. Call Odane today to get a free consultation with your next new home purchase or sale.