The Home Buyers’ Plan (HBP) is one of Canada’s most powerful tools for first-time buyers — allowing you to withdraw from your RRSP tax-free to fund your down payment.
But there are strict rules for eligibility, withdrawals, and repayment.
Here’s your complete 2025 guide.

What Is the Home Buyers’ Plan?

The HBP lets you withdraw up to $60,000 from your Registered Retirement Savings Plan (RRSP) without paying income tax — as long as the funds are used to buy or build your first qualifying home.

If you’re buying with a spouse or partner who also qualifies, you can each withdraw up to $60,000 — giving you up to $120,000 combined.

Who Qualifies in 2025?

You can use the HBP if:

• You are a first-time homebuyer (haven’t owned a home you lived in for the past 4 years)

• You are a Canadian resident at the time of withdrawal

• You have a written agreement to buy or build a qualifying home

• You intend to occupy the home as your principal residence within 1 year

💡 Special note: If you have a disability or are helping a disabled relative, you may still qualify even if you’ve owned a home recently.

How the Withdrawal Works

1. Contribute to your RRSP — Contributions must remain in your RRSP for at least 90 days before withdrawal to get the tax deduction.

2. Apply to Withdraw — Complete Form T1036 (“Home Buyers’ Plan Request to Withdraw Funds from an RRSP”) and submit it to your financial institution.

3. Receive Your Funds — You can make a single lump sum withdrawal or multiple withdrawals in the same calendar year, as long as you stay under the $60,000 limit.

Repayment Rules

• You get a 2-year grace period before repayments start.

• You must repay 1/15th of the withdrawn amount each year for 15 years.

• Repayments go back into your RRSP (not your FHSA or TFSA).

• If you miss a repayment, that year’s required amount is added to your taxable income.

Example:
Withdraw $45,000 → Annual minimum repayment = $3,000 starting in year 3.

Strategic Uses of the HBP in 2025

1️⃣ Combine HBP with FHSA

• Open and max your First Home Savings Account for up to $40,000 tax-free.

• Use HBP for up to $60,000 more from RRSP.

• Combined: Up to $100,000 per person — or $200,000 for a couple — toward your home.

2️⃣ Time Contributions for Maximum Deduction

• Make RRSP contributions when you’re in a higher tax bracket to get a larger refund.

• Withdraw later for your home — without paying tax on the withdrawal.

3️⃣ Use Tax Refunds to Boost Down Payment

• Your RRSP contribution generates a tax refund.

• Apply that refund to your down payment fund immediately.

Mistakes to Avoid

❌ Withdrawing too early — If you take funds before you’re ready to buy, you have 1 year to close, or you’ll face taxes.
❌ Not repaying on time — Missed repayments are fully taxable.
❌ Not coordinating with other savings accounts — FHSA and TFSA can boost your total savings with more flexibility.

HBP vs. FHSA: Which First?

FeatureHBP (RRSP)FHSAUpfront Tax Deduction✅✅Tax-Free Withdrawal✅ (if repaid)✅ (no repayment)Repayment Required✅❌Lifetime Limit$60K$40KFlexibilityLower (must repay)Higher (transfer to RRSP if unused)

💡 Pro Tip: Start with FHSA to avoid repayment rules, then use HBP for extra down payment room.

Final Word

The Home Buyers’ Plan can be a game-changer for your first home — but only if you understand the timelines and repayment rules.
Used alongside an FHSA and TFSA, it can drastically reduce the time it takes to save your down payment.

Want to see exactly how much you can combine from FHSA, TFSA, and HBP for your purchase?
I can create a personalized home savings strategy that maximizes tax deductions and shortens your buying timeline.

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