The RRSP Home Buyers' Plan is one of Canada's most underutilized retirement account features. It allows first-time home buyers to withdraw up to $35,000 ($70,000 combined for a couple) from their RRSP specifically for a home purchase — and the withdrawal is completely tax-free, as long as it gets repaid back into the RRSP over the following 15 years.
The mechanics are more specific than most people realize, and there are several traps that catch buyers off guard — particularly the seasoning rule and what happens if you can't make your repayments. This guide walks through all of it.
The Basic Rules
- Maximum withdrawal: $35,000 per person. Couples can each withdraw $35,000 for a combined $70,000.
- First-time buyer definition: You haven't owned a home that you lived in as your principal residence at any time in the past 4 calendar years. (Note: if you owned a home but your spouse didn't, your spouse can still qualify.)
- The property: Must be a qualifying home — a housing unit in Canada you intend to occupy as your principal residence within one year of buying or building.
- Repayment period: 15 years, starting the second year after the withdrawal year.
- Tax form: File Form T1036 to make the withdrawal. Your RRSP provider will issue a T4RSP for the withdrawal amount, which you report but offset against the HBP deduction on Schedule 7.
The 90-Day Seasoning Rule — This Catches People
You cannot withdraw funds that were contributed to your RRSP within 90 days before the withdrawal date.
If you contribute $20,000 to your RRSP in March and try to use the HBP in May, that $20,000 is not eligible — it's under 90 days old. Only funds that have been in the RRSP for more than 90 days qualify for HBP withdrawal.
The tax deduction for a contribution used for HBP is still valid — you get the deduction, but you don't get the HBP withdrawal. This is a distinction that confuses many first-time buyers who try to "RRSP sprint" in the months before closing.
The practical implication: you need to plan the HBP 90+ days before you expect to close on a property. If you're planning to buy in the spring, RRSP contributions earmarked for the HBP should be made no later than the previous December or early January.
How Repayment Works
The repayment period begins in the second calendar year after the year of withdrawal. If you withdrew in 2025, your first repayment is due for the 2027 tax year (payable by March 1, 2028 deadline).
Each year, CRA sends you a notice showing how much you need to repay that year — 1/15th of the total amount withdrawn. If you withdraw $30,000, you must repay $2,000/year for 15 years.
If you miss a repayment: The missed repayment amount is added to your income for that year and taxed at your marginal rate. This is not a penalty — it's income inclusion. If you withdraw $30,000 and repay nothing for 15 years, the entire $30,000 is eventually included in income, eliminating the tax deferral benefit of the RRSP withdrawal.
You can make repayments at any time — ahead of schedule, larger than the minimum, or in lump sums. Any amount above the minimum in a given year reduces the outstanding balance and future annual minimums proportionally.
Example: $35,000 HBP withdrawal in 2025
First repayment due: 2027 tax year (by March 1, 2028)
Annual minimum: $35,000 ÷ 15 = $2,333/year
If you make an extra $10,000 repayment in 2028: remaining balance = $35,000 − $2,333 − $10,000 = $22,667, divided over the remaining years.
If you miss the 2027 repayment entirely: $2,333 is added to your 2027 taxable income.
HBP and the FHSA — How They Interact
Since the First Home Savings Account (FHSA) launched in 2023, buyers have a new tool that's often better than the HBP for most situations — because FHSA withdrawals never need to be repaid. The tax treatment is the same (contributions deductible, qualified withdrawals tax-free), but there's no repayment obligation.
The strategic question for 2025–2026 first-time buyers:
- Max FHSA first ($8,000/year, lifetime limit $40,000). FHSA withdrawals for a first home are completely tax-free with no repayment.
- Use HBP as a top-up if you need more than $40,000 for your down payment. The combination of FHSA ($40,000) + HBP ($35,000) = $75,000 per person, or $150,000 for a couple — a substantial down payment in many Canadian markets.
- Don't use HBP for money you might need elsewhere — you're borrowing from your retirement with a 15-year repayment obligation. If you withdraw $35,000 from RRSP and then can't afford repayments, you've effectively taxed that money.
For a detailed look at the FHSA, see the FHSA guide. For the calculator that compares using FHSA vs. RRSP HBP for your specific situation, see the FHSA/RRSP calculator.
Couples and the HBP
Both partners in a couple can each withdraw up to $35,000 for a total of $70,000, provided both qualify as first-time buyers under the 4-year rule. They file separate T1036 forms — the withdrawals are independent.
If only one partner qualifies as a first-time buyer (the other owned a home within the last 4 years), only the qualifying partner can use the HBP. The other partner can contribute to and invest within a regular non-registered account or TFSA for the down payment.
Re-Using the HBP
You can use the HBP more than once — as long as you've fully repaid the previous HBP balance before the start of the year you want to withdraw again, and you qualify as a first-time buyer again (which is possible if you haven't owned a principal residence for 4 years). In practice, this typically applies to people who sold their home, rented for 4+ years, and want to buy again.
The Lifelong Learning Plan (LLP) — The Education Equivalent
The HBP has a lesser-known cousin: the Lifelong Learning Plan (LLP) allows RRSP withdrawals of up to $10,000/year (lifetime maximum $20,000) for full-time education. Like the HBP, it must be repaid over 10 years (not 15), with the same income-inclusion consequence for missed repayments. The LLP is a separate mechanism — you can use both the HBP and LLP at different times.
For more on RRSP strategy generally — including the best investments for RRSP accounts, optimal contribution timing, and spousal RRSP mechanics — see the RRSP guide. For the RRIF conversion that your RRSP will eventually require, see the RRIF withdrawal guide.