Home Buyers' Plan (HBP/RAP): using your RRSP to buy a first home

How much can you withdraw?

The HBP withdrawal limit is currently $60,000 per person. A couple who each have an RRSP can therefore withdraw up to $120,000 for the same home. No tax is withheld on a withdrawal of $60,000 or less.

Eligibility

The main conditions:

• Be a first-time buyer: neither you nor your spouse owned the home you lived in during the previous 4 years.
• Have a written agreement to buy or build a qualifying home in Canada.
• Intend to live in it as your main home within a year of buying it.
• Be a Canadian resident until the purchase. Funds must have been in the RRSP for at least 90 days to stay deductible.

The 15-year repayment

You have 15 years to pay your RRSP back, at least 1/15 of the amount each year. For a first withdrawal made between January 1, 2022 and December 31, 2025, repayment is deferred and starts in the fifth year after the withdrawal. Otherwise it starts in the second year after the withdrawal.

If you don't repay the required amount for a year, the shortfall is added to your taxable income for that year. Example: $30,000 withdrawn = $2,000 to repay each year.

HBP + FHSA: an example for a Quebec couple

Since 2023, you can use both the HBP and the FHSA for the same home. The FHSA allows $8,000 of contributions a year ($40,000 lifetime), deductible like an RRSP and withdrawn tax-free with no repayment. Example: a couple with $25,000 each in their FHSAs who each withdraw $20,000 from their RRSPs through the HBP has a $90,000 down payment. Only the $40,000 from the HBP must be repaid.