The Home Buyers' Plan allows an eligible individual to withdraw up to $60,000 from their RRSP, tax-free, to put toward buying or building a qualifying home. This limit was raised from $35,000 to $60,000 for withdrawals made on or after 16 April 2024 — training material or a client's own memory of the program that still cites $35,000 is out of date and should not be repeated. The limit applies per person, so a couple who each independently qualify can draw a combined $120,000 between them toward the same purchase.
Eligibility as a first-time buyer for HBP purposes turns on a specific lookback test: broadly, the individual (and their current spouse or common-law partner) must not have owned and occupied a home as a principal residence during the four preceding calendar years, nor during the current year before the withdrawal outside a narrow 30-day exception. This lookback-based definition is what allows someone who owned a home years ago, then rented for a long enough period, to qualify again as a first-time buyer under this specific program.
HBP withdrawals are not gifts from the government — they are structured as an interest-free loan from the RRSP to the individual, repayable over 15 years in minimum annual instalments of one-fifteenth of the amount withdrawn. For a full $60,000 withdrawal, that works out to a minimum of roughly $4,000 per year. Missing a scheduled minimum repayment does not trigger a penalty in the way a missed loan payment might elsewhere, but the shortfall is instead added to the individual's taxable income for that year.
The grace period before repayment must begin depends on when the withdrawal occurred. A temporary extension allowed withdrawals made between 2022 and 2025 a longer grace period, with repayment beginning in the fifth calendar year after the withdrawal. That extension has run its course: for withdrawals made in 2026 and beyond, the standard rule applies, and repayment begins in the second calendar year after the year of withdrawal — a client withdrawing funds in 2026, for example, would need to begin repayment in 2028.
The First Home Savings Account is a separate, newer registered account, not a withdrawal program against an existing RRSP. An eligible individual can contribute up to $8,000 per year, tax-deductible in the same way an RRSP contribution is, up to a lifetime contribution limit of $40,000. Unused annual room can be carried forward, up to a maximum of $8,000 of carry-forward available in a given year, meaning a person who contributes less than the annual maximum in one year can catch up somewhat in a later year, though never exceeding the $40,000 lifetime ceiling in total.
The defining feature of the FHSA, and what makes it more attractive than an RRSP for this specific purpose, is that a qualifying withdrawal to buy a first home is entirely tax-free on both the contribution and any investment growth inside the account — unlike the HBP, there is no repayment obligation attached to an FHSA withdrawal at all.
A borrower can use the Home Buyers' Plan and the FHSA together on the same home purchase, drawing on both a $60,000 RRSP withdrawal and up to $40,000 of FHSA savings, provided both sets of eligibility conditions are independently met. Combined with a partner doing the same, this can represent a substantial, entirely legitimate source of down payment funds worth walking through carefully with any client who has RRSP savings, FHSA savings, or both.
One program worth flagging specifically as no longer available is the federal First-Time Home Buyer Incentive, a shared-equity program that was discontinued for new approvals as of March 2024. A client or a colleague repeating older information about a government shared-equity contribution to a down payment is very likely thinking of this now-defunct program — it should not be presented to a client as a current option.
A client is planning to withdraw funds under the Home Buyers' Plan in 2026. When does their repayment period begin, and how much do they need to repay annually at minimum?
For withdrawals made in 2026 and later, the standard rule applies: repayment begins in the second calendar year after the year of withdrawal, so a 2026 withdrawal starts its repayment clock in 2028, at a minimum of one-fifteenth of the total per year over 15 years. The five-year grace period was a temporary measure that applied specifically to withdrawals made between 2022 and 2025, not to 2026 withdrawals — repeating that timeline for a 2026 client would be out of date. The HBP is structured as a repayable RRSP withdrawal, not a one-time full repayment or a no-repayment gift, which rules out the other two options.
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