The RRSP Home Buyers’ Plan lets an eligible first time buyer withdraw up to $60,000 from a registered retirement savings plan, tax free, to buy or build a home. A couple who both qualify can withdraw up to $120,000 between them, and you repay the money to your RRSP over the years that follow.
This guide explains how the plan works in 2026, who qualifies, how the withdrawal and repayment work, and the Ontario points that catch first time buyers in Ontario out at closing. We close real estate purchases across Ontario every week, so this is written from the buyer’s side of the table, where the plan meets the actual deal.
What is the RRSP Home Buyers’ Plan?
The Home Buyers’ Plan, or HBP, is a federal program run by the Canada Revenue Agency under the Income Tax Act. It lets you take money out of your RRSP to buy or build a qualifying home without paying tax on the withdrawal at the time, as long as you pay it back to your RRSP over the repayment period that follows.
A normal RRSP withdrawal is taxed as income in the year you take it. The HBP is the exception. You are effectively lending the money to yourself, interest free, and putting it back over time. That is why so many first time buyers in Ontario use it to top up a down payment.
The plan applies to a qualifying home anywhere in Canada. That includes a detached or semi detached house, a townhouse, a condominium unit, a mobile home, and a share in a cooperative housing corporation that gives you an equity interest in a unit. The home has to be one you intend to live in as your principal residence within a year of buying or building it.
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How much can you withdraw from your RRSP under the plan?
You can withdraw up to $60,000 from your RRSPs under the HBP. This limit rose from $35,000 for withdrawals made after April 16, 2024, so older articles that still say $35,000 are out of date.
The limit is per person, not per home. If you and a spouse or partner both qualify and both have RRSP savings, you can each withdraw up to $60,000, for a combined $120,000 toward the same purchase. You do not have to withdraw the maximum, and there is no minimum, so you can take only what you need.
One point trips people up. The dollar limit that applies is the one in effect on the date of your first withdrawal. If you make your first withdrawal in one year and a second withdrawal for the same home early the next year, both fall under the limit that applied on that first date.
Who counts as a first time home buyer for the HBP?
To use the HBP you generally have to be a first time home buyer in the eyes of the CRA, and you have to be a resident of Canada when you withdraw and when you buy or build.
The CRA definition is more forgiving than most people expect. You count as a first time buyer if you did not live in a home that you owned, or that your spouse or common law partner owned, at any time in the year of the withdrawal or in the four calendar years before it. Because of that four year lookback, someone who owned a home years ago can become a first time buyer again. This is sometimes called the four year reset.
Two exceptions let you use the plan even if you do not meet the first time test. The first is for buyers with a disability, or buyers helping a related person who has a disability acquire a more suitable home, where that person qualifies for the disability tax credit. The second is for buyers going through a relationship breakdown, where you have lived separate and apart from your spouse or partner for at least 90 days because the relationship ended. That route has its own conditions, so confirm them before you rely on it.
You also need a written agreement to buy or build the qualifying home before you withdraw. A vague plan to buy at some point is not enough.
How does the HBP withdrawal process work?
The mechanics matter, because a timing slip can cost you the tax benefit. Here is the order things happen in.
First, the money has to sit in your RRSP long enough. Contributions you put into your RRSP have to stay there for at least 90 days before you withdraw them under the HBP. If you contribute and then withdraw inside that window, you can lose the deduction on those contributions. Buyers who scramble to fund an RRSP weeks before closing often run straight into this rule.
Second, you fill out Form T1036, the Home Buyers’ Plan request to withdraw funds from an RRSP. You give the completed form to the financial institution that holds your RRSP, and it releases the funds and reports the withdrawal to the CRA.
Third comes the timing against your closing. You can withdraw up to 30 days after you take title to the home, but not before you have the written agreement. In practice most buyers withdraw shortly before closing so the funds are ready for the down payment. You must buy or build the qualifying home by October 1 of the year after the year of your first withdrawal. Miss that date and you have to cancel your participation, which you do using Form RC471, then repay the money or have it taxed.
If your purchase falls through after you have withdrawn, you are not stuck. You can cancel and repay the amount by the deadline the CRA sets, generally by the end of the year after the year you withdrew, and avoid having it taxed.
How do you repay the Home Buyers’ Plan?
You repay the amount you withdrew to your RRSP over a maximum of 15 years. Each year you owe one fifteenth of the total until the balance reaches zero.
You make a repayment by contributing to your RRSP in the year a repayment is due, or in the first 60 days of the following year, then designating that contribution as an HBP repayment on Schedule 7 when you file your return. This designation step is the one people forget. If you contribute to your RRSP but do not designate the amount as a repayment, the CRA treats it as an ordinary contribution, your required repayment goes unpaid, and the shortfall is added to your taxable income for that year. You cannot undo that later.
When repayment starts depends on when you made your first withdrawal. Normally it begins in the second year after the year of your first withdrawal. A temporary relief measure extends that delay to five years for first withdrawals made between January 1, 2022 and December 31, 2025, so repayment starts in the fifth year instead. The 2026 federal Spring Economic Update extended the same five year grace period to first withdrawals made through December 31, 2028. These dates are current as of this article’s publication, so confirm the rule that applies to your year with the CRA before you plan around it.
You can always repay faster than the minimum. Paying more in an early year reduces what you owe in later years.
Can you use the HBP with the FHSA and the Home Buyers’ Amount?
Yes, and combining them is where a first time buyer in Ontario can pull together a much larger down payment. The three federal tools stack.
The First Home Savings Account, or FHSA, lets you contribute up to $8,000 a year to a lifetime limit of $40,000. Contributions are deductible like an RRSP, and qualifying withdrawals for a first home come out tax free and never have to be repaid. The CRA confirms you can make an HBP withdrawal from your RRSP and a qualifying FHSA withdrawal for the same home, as long as you meet each program’s conditions at the time of each withdrawal.
The federal Home Buyers’ Amount is a tax credit, not a withdrawal. If you qualify, you claim $10,000 on line 31270 of your return for the year you buy. The credit is worth 15 percent of that, so up to $1,500 off your federal tax. Couples can split the claim, but the combined total cannot exceed $10,000.
Here is how the three compare.
| Feature | Home Buyers’ Plan | First Home Savings Account | Home Buyers’ Amount |
|---|---|---|---|
| What it is | Withdraw from your RRSP | Dedicated first home savings account | Tax credit on your return |
| Limit | Up to $60,000 per person | $8,000 a year, $40,000 lifetime | Claim $10,000, worth up to $1,500 |
| Tax on the money | Tax free if repaid | Tax free, no repayment | Reduces tax owing |
| Repayment | Yes, over up to 15 years | None | None |
| Combine for the same home | Yes | Yes | Yes |
Figures are current as of publication. A tax professional can help you sequence FHSA and RRSP contributions for the largest benefit, since the timing of deductions matters.
The Ontario detail most first time buyers miss
This is the point we explain in nearly every first consultation, and it surprises people. Qualifying for the HBP does not mean you qualify for Ontario’s first time buyer land transfer tax refund. They use different tests, and the Ontario test is stricter.
When you buy in Ontario you pay land transfer tax on closing. If you buy inside the City of Toronto you pay a second municipal land transfer tax on top. A first time buyer can claim a refund of up to $4,000 on the provincial tax, which wipes it out entirely on a home priced up to about $368,000 and reduces it on anything higher. In Toronto you can also claim a municipal refund of up to $4,475. Combined, that is up to $8,475 back.
Now the trap. For the CRA’s HBP, you can become a first time buyer again under the four year reset. For Ontario’s land transfer tax refund, you cannot have owned a home, or an interest in a home, anywhere in the world, ever. There is no reset. And your spouse’s history counts. If your spouse owned a home while you were together, you can be disqualified even though you have never owned anything yourself, unless that home was sold before you became spouses. The refund is also limited to Canadian citizens and permanent residents, with an 18 month window to qualify if your status is still pending.
So a buyer can be fully entitled to a $60,000 HBP withdrawal and still get nothing from the provincial refund. We see this most often where one partner owned a condo years ago, or where a spouse owned property abroad. Sorting it out before closing is far easier than after.
You claim the refund at registration, and your lawyer handles that step through the electronic land transfer tax statements when the transfer is registered. If it is not claimed at closing, you have 18 months from registration to apply to the Ontario Ministry of Finance.
The mistakes we see first time buyers make with the HBP
A few errors come up again and again. Each one has a real cost.
- Funding the RRSP too late. Money has to be in the RRSP for 90 days before you withdraw it under the plan. Contribute the week before closing and you can lose the deduction on that contribution. Plan the contribution at least three months out.
- Assuming HBP eligibility equals land transfer tax refund eligibility. They are different tests. Prior ownership by you or a spouse, anywhere in the world, can cost you up to $8,475 in Toronto even when the HBP is wide open to you.
- Forgetting to designate the repayment. Contributing to your RRSP is not the same as repaying the HBP. Without the designation on Schedule 7, the repayment goes unmade and the shortfall is taxed as income.
- Withdrawing without a written agreement. The HBP needs a signed agreement to buy or build before you withdraw. Pulling funds on the strength of a handshake puts the tax treatment at risk.
- Treating the withdrawal as free money. It is a loan from your own retirement savings. You give up the growth on that money until you repay it, and the repayments arrive whether the budget is tight or not.
Your HBP closing checklist
Run through these before you rely on the plan.
- Confirm you meet the CRA first time buyer test, or one of the exceptions.
- Make sure any RRSP contribution you plan to withdraw has been in the account for 90 days.
- Have a signed agreement of purchase and sale in hand before you withdraw.
- File Form T1036 with your RRSP institution and plan the withdrawal around your closing date.
- Separately confirm whether you qualify for the Ontario, and if applicable Toronto, land transfer tax refund, taking your spouse’s ownership history into account.
- Know when your repayment period starts and set a reminder for the first repayment year.
- Talk to your lawyer early so the timing lines up on closing day.
Frequently asked questions
Can I use the Home Buyers’ Plan if I owned a home before?
Often, yes. The CRA treats you as a first time buyer again if neither you nor your spouse or common law partner lived in a home you owned during the year of withdrawal or the four calendar years before it. Be careful though, because Ontario’s land transfer tax refund has no such reset, so prior ownership can still cost you the provincial and Toronto refunds even when the HBP is available.
How much can a couple withdraw together?
Up to $120,000, if you both qualify and both have the savings, since the $60,000 limit is per person. You each file your own Form T1036 and each repay your own share over time.
When do I have to start repaying?
It depends on your first withdrawal year. Normally repayment starts in the second year after the year you first withdrew. For first withdrawals between January 1, 2022 and December 31, 2025, a temporary relief measure pushes that to the fifth year, and the 2026 Spring Economic Update extended the same five year grace period to first withdrawals through December 31, 2028. Confirm the year that applies to you with the CRA.
What happens if I miss a repayment?
The amount you were required to repay that year is added to your taxable income, so you pay tax on it, and you cannot reverse it afterward. This usually happens by accident, when someone contributes to their RRSP but forgets to designate the amount as a repayment on Schedule 7.
Can I use the HBP and the FHSA for the same home?
Yes. The CRA lets you make an HBP withdrawal and a qualifying FHSA withdrawal for the same purchase, as long as you meet the conditions for each at the time. The FHSA withdrawal is tax free and does not have to be repaid, which makes the two a strong combination for a first home.
Do I get my land transfer tax refunded automatically because I used the HBP?
No. The refund is a separate Ontario program with its own eligibility, and the HBP does not trigger it. Your lawyer assesses it and claims it at registration if you qualify. If a spouse owned a home while you were together, raise it early, because it can change the result.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
