Using Your RRSP to Buy a Home: The Home Buyers' Plan
Borrow from your own retirement savings for your down payment, tax-free.
The quick version
The Home Buyers' Plan (HBP) lets you withdraw up to $60,000 from your RRSP for your first home.
Buying with a partner? That is up to $120,000 together.
The withdrawal is tax-free, as long as you pay it back over 15 years.
Money must be in your RRSP for at least 90 days before you withdraw it.
You can use it together with your FHSA.
Wondering how to combine your RRSP and FHSA? Book a call and I will help you build your down payment plan.
Who qualifies?
Generally, you need to be a first-time home buyer. That means you have not lived in a home that you, or your spouse or common-law partner, owned at any time this year or in the previous four calendar years.
Exceptions:
Disability: if you have a disability, or are buying a more accessible home for a related person with a disability, you may qualify even if you are not a first-time buyer.
Separation: if you are living apart from your spouse or partner because of a relationship breakdown, you may qualify again.
The rules to know
The 90-day rule: RRSP contributions need to sit in your account for at least 90 days before you withdraw them under the HBP. If not, you lose the tax deduction on that contribution.
Buy on time: you need to buy or build your home before October 1 of the year after your withdrawal.
Live in it: you must plan to live in the home as your principal residence within one year.
Paying it back
You have 15 years to repay your RRSP.
Repayments usually start the second year after your withdrawal.
If your first withdrawal was between 2022 and 2025, you got extra time: repayments start the fifth year after.
The CRA sends you a statement each year showing how much is due.
Miss a payment? That year's amount is added to your taxable income.
You can always pay it back faster.
HBP or FHSA?
Why not both? You can use both for the same home.
The FHSA never has to be paid back, so for most first-time buyers it is the place to start.
The HBP is a great top-up, especially if you already have RRSP savings.
Together, one person could put up to $100,000 toward a first home.
Everyone's tax situation is different. Check with your accountant or financial advisor about what is best for your overall plan.
Let us build your down payment plan
I will help you see how your RRSP, FHSA and savings work together, so you know exactly what you will have for your down payment and closing costs. Book a call anytime.
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