You’ve been saving for years — and now you’re ready to buy your first home. But what if part of your down payment has been sitting in your RRSP this whole time?
Enter the Home Buyers’ Plan (HBP) — a federal program that lets you use your RRSP savings tax-free to help buy or build your first home. Let’s break down how it works, who qualifies, and what to watch for.
💡 What Is the Home Buyers’ Plan?
The HBP allows eligible buyers to withdraw up to $60,000 from their RRSP (as of 2024) to put toward a down payment — without paying income tax on that withdrawal.
If you’re buying with a partner, each of you can withdraw up to $60,000 — meaning a combined $120,000 toward your home.
🧾 Who’s Eligible?
To qualify for the program, you must:
- Be a first-time home buyer (or not have owned a home in the last four years)
- Be a Canadian resident at the time of withdrawal
- Have a written agreement to buy or build a qualifying home
- Intend to live in the home as your principal residence within one year
💡 Bonus: Even if you’ve owned a home before, you may re-qualify after a four-year period without homeownership.
💰 How the Withdrawal Works
- Confirm your eligibility through your mortgage broker or financial advisor.
- Submit CRA Form T1036 (Request to Withdraw Funds from an RRSP).
- Funds are sent directly from your RRSP account to your bank or lawyer for your home purchase.
The withdrawal must happen before closing and within 30 days of taking possession.
🔄 Repayment Rules (Don’t Skip This Part!)
You’ll need to repay the full amount within 15 years, starting two years after the withdrawal.
Each year, the CRA will show your required repayment amount on your tax return.
- Minimum yearly repayment = total withdrawn ÷ 15
- If you skip a payment, that portion is added to your taxable income for the year.
💡 Example: You withdraw $45,000 → you’ll need to repay at least $3,000 per year for 15 years.
📈 Why the HBP Can Be a Smart Move
✅ Use your own savings instead of borrowing more.
✅ Avoid income tax on your RRSP withdrawal.
✅ Boost your buying power without waiting years to save.
✅ Pair it with other incentives (like the First-Time Home Buyer’s Tax Credit or shared-equity programs).
⚠️ Things to Watch For
- You must repay on schedule to avoid tax penalties.
- RRSP funds must be in the account for at least 90 days before withdrawal.
- Not all RRSP products are eligible — check with your bank or advisor first.
- If you’re changing jobs, confirm you can still access employer-locked RRSP funds.
✉️ Thinking About Using Your RRSP for a Down Payment?
It’s one of the most flexible tools first-time buyers have — but timing and paperwork matter.
Our ARIVL team can connect you with trusted mortgage brokers and financial planners who’ll help you decide if the Home Buyers’ Plan fits your goals and budget.
📩 Email hq@arivl.ca or call Jakie at 780-224-5566 to start planning your path to homeownership.
Because every great real estate adventure starts with smart strategy.
ARIVL: Your Real Estate Adventure Awaits!
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