Tue. Jun 25th, 2024

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The Home Buyers’ Plan (HBP) is a valuable program that allows first-time homebuyers to use their Registered Retirement Savings Plan (RRSP) savings to purchase a home. This program provides a tax-efficient way to fund a down payment, making homeownership more accessible for Canadians. In this article, we’ll explore the details of the Home Buyers’ Plan and how you can use your RRSP to buy a home.

Understanding the Home Buyers’ Plan (HBP)

The Home Buyers’ Plan (HBP) allows eligible individuals to withdraw up to $35,000 from their RRSP to use towards the purchase of a qualifying home. To qualify, you must be a first-time homebuyer, meaning you haven’t owned a home as your principal residence in the past four years. Additionally, the funds must be used to buy or build a home that will be your principal place of residence within one year of withdrawal.

Advantages of Using the HBP

Using the Home Buyers’ Plan (HBP) offers several advantages for first-time homebuyers. Firstly, it allows you to access your RRSP savings without incurring tax penalties, providing a tax-efficient source of funding for your down payment. Secondly, by using your RRSP savings for a down payment, you can potentially avoid the need for mortgage default insurance, saving you thousands of dollars in insurance premiums.

Repayment Requirements

While the Home Buyers’ Plan (HBP) allows you to withdraw funds from your RRSP tax-free, you are required to repay the amount withdrawn over a period of up to 15 years. Repayments start two years after the year of withdrawal, and you must repay at least 1/15 of the total amount withdrawn each year. If you fail to make the required repayments, the outstanding amount will be added to your taxable income for that year.

Eligibility and Considerations

To be eligible for the Home Buyers’ Plan (HBP), you must meet certain criteria, including being a first-time homebuyer and having sufficient RRSP funds available for withdrawal. Additionally, there are considerations to keep in mind, such as the impact of withdrawing RRSP funds on your retirement savings and the importance of repaying the withdrawn amount within the specified timeframe.


The Home Buyers’ Plan (HBP) offers first-time homebuyers a tax-efficient way to use their RRSP savings towards the purchase of a home. By understanding the eligibility criteria, advantages, repayment requirements, and considerations of the HBP, you can make an informed decision about whether it’s the right option for you. Whether you’re dreaming of homeownership or looking to take advantage of the real estate market, the Home Buyers’ Plan can help you achieve your homeownership goals while maximizing your RRSP savings.

By Wade

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