All About Canada’s Home Buyers’ Plan

The Home Buyers’ Plan is the only tax-free way to withdraw from your RRSPs to purchase your home.

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw money from your registered retirement savings plan (RRSP) to buy a home. You can withdraw up to $25,000 to pay for your home and couples can withdraw $25,000 each. There is a two-year grace period to pay back your RRSP after which point you must pay back your withdrawal over the course of 15 years.

Why is the HBP Important to me?

It is extremely important to put money away for your retirement and for investments. RRSPs are some of the most important tools Canadians use to plan for their future. I advise my young friends to start at least one RRSP account as soon as they can!

The Home Buyers’ Plan (HBP) is the only way to withdraw from your RRSPs tax free. The HBP allows us to use our investments as a downpayment for our primary (live-in) residence. For young home buyers who have been diligently investing for their future, using their RRSPs may be the only source of income they have to use for their downpayment.

Rules and Regulations

You must repay any withdrawals to your RRSPs within 15 years. Your first repayment starts the second year following the year you made your withdrawal. In other words, you have a two year grace period before you need to start repaying into your RRSPs. The amount that you have to repay per year will be scheduled ahead of time at 1/15 of the amount you withdrew.

• Your RRSP money must have remained in your RRSP for at least 90 days before you can use them in your HBP.
• You may also apply if you intend to buy or build a home for a relative with a disability.
• Your home that you are purchasing must be a home that you intend to live in,
• You are considered a first-time home buyer. (You are considered a first-time home buyer if you have not owned your own home within the past four years.)