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What is the Home Buyers' Plan (HBP) and How Does It Work?

The Home Buyers' Plan (HBP) allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home without paying taxes on the withdrawal.

Samuel Jones avatar
Written by Samuel Jones
Updated over 3 months ago

Key HBP Facts

  • Who Can Use the HBP

    • First-time homebuyers or those who haven’t owned a home in the previous four years

    • Must intend to occupy the home as your principal residence within one year of purchase or build

  • Maximum Withdrawal

    • You can withdraw up to $35,000 from your RRSP under the HBP

  • Repayment Requirement

    • Withdrawn funds must be repaid to your RRSP over a 15-year period starting the second year after the withdrawal

    • Annual repayments are 1/15th of the total amount withdrawn

Important Deadline

  • You must buy or build the qualifying home by October 1 of the year after the withdrawal

    • Example: If you withdraw funds in 2023, you must buy or build the home by October 1, 2024

Why Use the HBP?

  • Access Your Savings Tax-Free

    • Withdraw from your RRSP without triggering immediate tax payments

  • Support Your Home Purchase

    • Use the funds for a down payment or other home-buying costs

  • Flexible Repayment Terms

    • Repay gradually over 15 years without interest

How to Participate in the HBP

  • Check if you meet the eligibility requirements for first-time homebuyers

  • Fill out Form T1036 – Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP and submit it to your RRSP provider

  • Use the withdrawn funds toward your qualifying home purchase or build

Early Repayment Benefits

  • Save on Taxes

    • Repaying more than the minimum amount or repaying early reduces the taxable amount you would need to add to your income if a repayment is missed

  • Grow Your Retirement Savings

    • Early repayments return funds to your RRSP sooner, allowing them to benefit from tax-deferred growth

  • Flexibility

    • You can make lump-sum payments or contribute more than the required amount annually, accelerating your repayment timeline

Why This Matters

The HBP is a valuable tool for first-time homebuyers to access their savings and make homeownership more affordable.

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