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Writer's pictureTina Kha

The RRSP Home Buyers' Plan (HBP)

Updated: Apr 23

Utilizing RRSP for Home Purchase:

The Home Buyers' Plan (HBP) allows first time homebuyers to withdraw from their Registered Retirement Savings Plan (RRSP) tax-free. Considering combining the HBP with an FHSA for a larger down payment? Let's explore if this strategy suits you.


What is the HBP Withdrawal Limit?

As of April 16 2024, withdrawal limit is $60,000. You can withdraw funds from multiple RRSPs, provided you own each account. Spouses or common-law partners can collectively withdraw up to $120,000 ($60,000 each) for a home purchase if both meet the eligibility criteria.

HBP permits tax-free withdrawals from your RRSP for a qualifying home purchase. Leveraging this program allows you to maintain your investment fund for future needs while repurposing your RRSP investment into a real estate purchase.


When do you have to repay HBP?

  • repayable through installments over 15 years timeframe

  • As of April 16 2024, those who withdraw funds from their RRSP between Jan. 1, 2022, and Dec. 31, 2025, will have up to 5 years to restart payments (instead of the previous 2 years)


Do you qualify for HBP?

Being considered a first-time homebuyer, intending to live in the home as a primary residence, and having a written agreement to purchase or build a qualifying home are vital prerequisites.

  • Must be considered a first time home buyer

  • Written purchase agreement for building a qualifying home or existing home

  • Intended use of the property is primary residence


Can HBP be combined with an FHSA ?

Presents an opportunity to merge two savings products towards your primary home investment. Unlike the HBP, the FHSA doesn't require repayment, allowing tax-free withdrawals based on eligibility conditions.

Exploring the HBP can be a strategic financial move, offering dual benefits as a retirement and real estate investment. While the repayment period affects interest accumulation, it might align with your overall financial strategy, aiding your initial real estate purchase.


Is the RRSP Home Buyers' Plan worth it?

Taking advantage of the home buyers' plan is a great way to boost your down payment without having to pay income taxes for the withdrawal (if repaid on time)

With a repayment period of 15 years, this is plenty of time to pay it back. Having access to RRSP funds helps you afford your first home purchase.



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