HBP – Home Buyers' Plan
An HBP (Home Buyers’ Plan) allows you to withdraw money from your RRSP (Registered Retirement Savings Plan) to buy your first home.
Under the HBP, you can withdraw a portion or all of your RRSP to buy a property. You would not pay income tax if you withdraw. However, you’ll have to put the money back into your RRSP in the following years. When you “pay back” into your RRSP, you won’t receive a tax deduction.
What is the maximum amount that can be withdrawn?
- You can’t withdraw more than $35,000. However, you can withdraw less.
- If you and your spouse together buy a home, you may each withdraw $35,000.
Qualifying homes
Most types of homes are eligible. For example:
- A single-family home
- A mobile home
- A condo or a semi-detached home
It could be an existing building or a new construction.
Can the HBP be used to buy something other than a first home?
Yes and no. To use the HBP, you must be the buyer of a first home that you plan to occupy. Nonetheless, you can use the HBP money as you please, whether or not it’s for your home.
First-time home buyer?
Did you know that you can use the funds withdrawn under the HBP as you see fit, provided the conditions for participating in the HBP are met? You could invest them or use them to pay off expensive debts. This guide offers up a range of attractive strategies to get the most of the HPB.
How does the repayment work?
Each year, you’ll be required to pay back into your RRSP at least 1/15 of the amount withdrawn under the HBP. There is however a delay before the first repayment has to be made.
You won’t receive any tax deductions on the repayments
First HBP repayment
To start making HBP repayments, you'll be able to benefit from a delay. Your repayment period does not start in the year you withdrew funds from an RRSP for the HBP. The first payment can be made according to the following timeline:
For example, if you draw on an HBP on December 30, your repayment period will start no later than 2 years and 61 days afterwards. If you draw on an HBP on January 3, your repayment period will start no later than 3 years and 58 days afterwards. You won’t receive any tax deductions on the repayments.
Do you have questions about the HBP?
Check the relevant sections of the Canada Revenue Agency website, including:
- What is the Home Buyers’ Plan (HBP)?
This link will open in a new window - How to participate in the Home Buyers’ Plan (HBP) This link will open in a new window
Documentation and tools
Guide to Financial Planning for Retirement This link will open in a new window