RRSP Home Buyers' Plan in 2026 — withdraw up to $60,000

What the HBP is

The Home Buyers' Plan (HBP) is a federal program that lets first-time home buyers withdraw money from their Registered Retirement Savings Plan (RRSP) tax-free to use as a down payment on a first home. You then repay the withdrawal to your RRSP over 15 years.

It's existed since 1992 with periodic upgrades. The big 2024 change: the withdrawal limit jumped from $35,000 to $60,000 per person, the largest increase in the program's history. For couples, that's up to $120,000 of tax-deferred down payment funds at zero out-of-pocket tax cost.

How the HBP actually works

The mechanics:

1. Save into RRSPs in the years leading up to your purchase
2. Withdraw up to $60,000 for a qualifying first home — using form T1036
3. Receive the funds in your bank account — the bank withholds nothing if the form is filed properly
4. Close on the home within 30 days of withdrawal (or within the calendar year, whichever is earlier)
5. Start repayments in year 2 after withdrawal — minimum 1/15th of the withdrawn amount per year over 15 years
6. Miss a year's repayment → the missed portion is added to your taxable income for that year

The repayment isn't optional — but the consequences of missing are gentle (you just pay tax on the missed portion as if it had been a regular RRSP withdrawal that year). Many borrowers strategically miss in low-income years and catch up in high-income years.

The 2024 limit increase — why it matters

Before April 2024: limit was $35,000 per person ($70,000 per couple).

After April 2024: limit is $60,000 per person ($120,000 per couple).

For a couple with full RRSP room, the combined HBP + FHSA stack now reaches:

| Source | Per person | Per couple | |---|---|---| | FHSA | $40,000 | $80,000 | | HBP | $60,000 | $120,000 | | Total tax-advantaged | $100,000 | $200,000 |

On a typical Canadian first-home purchase ($600k–$900k), this stack often covers the full down payment without needing taxable savings at all.

The 90-day rule

There's an important catch: funds must be in your RRSP for at least 90 days before withdrawal under the HBP. So if you contribute to an RRSP today specifically to fund a home purchase next month, the HBP withdrawal won't qualify — the funds haven't seasoned.

This means timing matters:

• Contributing now (April 2026) → HBP-eligible from July 2026 onward
• Contributing in November 2026 → HBP-eligible from February 2027 onward
• Funds already in your RRSP from prior years → always HBP-eligible

If you're planning a purchase in 6–12 months and have RRSP room you haven't used, contribute NOW even if you don't have the full amount. Late contributions get caught in the 90-day rule and can delay your purchase.

Who qualifies as a "first-time home buyer"

The HBP's first-time buyer test is:

You (and your spouse / common-law partner) cannot have owned a home that you used as your principal residence during the 4 calendar years before the year of withdrawal.

Example: withdraw in 2026. You're a first-time buyer if you didn't own a principal residence anytime in 2022, 2023, 2024, or 2025.

Notes:

• Owning a rental property (where you never lived) doesn't disqualify you
• Vacation property that wasn't your principal residence may or may not disqualify — depends on use
• A previous home you sold years ago doesn't disqualify if you've been outside the 4-year window
• Buyers with disabilities (or someone helping a related person with disabilities acquire an accessible home) qualify even without the 4-year clean window

How to actually withdraw

Process:

1. Confirm RRSP balance ≥ amount you want to withdraw, with at least 90 days seasoning
2. Sign a firm purchase agreement for a qualifying first home
3. Complete CRA form T1036 — Request to Withdraw Funds from an RRSP under the HBP
4. Submit to your RRSP issuer (bank or brokerage) — they release the funds without withholding tax
5. Receive the funds in your bank account — typically 5–10 business days at major banks
6. Use the funds for closing

You can take multiple withdrawals if needed (different RRSP accounts, etc.) as long as the total stays under your HBP limit and you complete them before October 1 of the year following your closing.

Stack with the FHSA

The FHSA is strictly better than the HBP for first-home savings because it requires no repayment. So the stacking order is always:

1. Max FHSA first ($8,000/year up to $40,000 lifetime) — tax deduction going in, tax-free withdrawal coming out, no repayment required
2. Add HBP for additional needed amount (up to $60,000) — tax deferral going in, tax-free withdrawal, 15-year repayment required
3. Top up with TFSA if still short — flexible, no tax shelter on contributions but tax-free growth

For a single first-time buyer maxed on both: $40k FHSA + $60k HBP = $100,000 tax-advantaged down payment.

For a couple: $200,000.

See FHSA explained for the full FHSA mechanics.

What the HBP costs you in opportunity

The HBP is sometimes characterized as "borrowing from yourself at 0% interest." That's roughly accurate, but it's not quite free:

• The $60,000 you withdraw stops compounding in your RRSP for 15 years
• At a 6% real return, that $60,000 would have grown to ~$143,000 over 15 years
• Lost growth: ~$83,000 of retirement savings

But the offset:

• The $60,000 down payment goes into a home that historically appreciates 4–7% per year
• The mortgage you avoid (or shrink) pays itself off via tenant-like payments rather than rent
• The CMHC premium you avoid (by crossing 20% LTV) compounds savings

In most first-time-buyer scenarios, the HBP is net positive even accounting for the lost RRSP growth — because the alternative was likely renting longer, not aggressive RRSP investing.

How to manage the 15-year repayment

Each March, CRA sends you a Notice of Assessment showing your remaining HBP balance and your minimum repayment required for the year. Process:

• Year 1 (year of withdrawal): no repayment required
• Year 2 onward: minimum 1/15th of original HBP amount per year
• Repayment goes into RRSP — but it's NOT a fresh deductible contribution. You designate the deposit as an HBP repayment on your tax return (Schedule 7).
• Miss a year: the missed portion becomes taxable income that year (same as a regular RRSP withdrawal)
• Overpay a year: the excess reduces future minimum repayments

Most first-time buyers should automate the repayment via monthly contributions equal to 1/180th of the withdrawn amount ($333/month on a $60k withdrawal). Same approach across both spouses if you both used the HBP.

Common HBP mistakes

• Withdrawing within 90 days of contribution — funds don't qualify, withholding tax applies, headache to recover
• Missing the 30-day closing window — the withdrawn funds become taxable income unless redeposited
• Forgetting to designate repayments on Schedule 7 → CRA treats them as regular RRSP contributions and starts taxing the missed HBP portion
• Withdrawing more than you actually need — you can't redeposit the unused portion without it counting against your HBP balance
• Using the HBP when you'd be better off with FHSA — always FHSA first

What to do next

1. Confirm your RRSP balance + your spouse's
2. Check whether your funds are past the 90-day seasoning
3. Calculate your full down payment stack: down payment savings goal
4. Talk to a broker about your full first-time buyer down payment plan: FHSA + HBP + TFSA + any gifted amounts
5. File form T1036 with your RRSP issuer 2–4 weeks before your scheduled closing

The HBP is one of the better tools the federal government has built for first-time buyers. Combined with the FHSA, it's enabled a generation of Canadians to buy without taxable savings.