The Canadian government’s Home Buyers’ Plan (HBP)Opens a popup. lets you borrow money from your RRSP if:
- you're a first-time home buyer; or
- you’ve lived separately and apart from your spouse or common-law partner for at least 90 days and started living separately and apart anytime in the preceding 4 years as a result of a relationship breakdown (conditions apply).
If you’re looking to buy, build or maintain your primary residence, you can use this money for your down payment, closing costsOpens a popup. or both.
How much can I withdraw from my RRSP?
You can withdraw up to $35,000 from your RRSP per calendar year. Spouses or partners may also each withdraw up to $35,000 per calendar year — $70,000 in total. The borrowed funds must be in your RRSP for at least 90 days before taken out. Withdraw the money no later than 30 days after the closing dateOpens in popup..
How does the Home Buyers' Plan work?
You can borrow money from your RRSP tax-free if you pay it back to your RRSP starting no later than the second year after the withdrawal date. Pay back the full amount within 15 years, through regular payments. Every year, the government sends you a statement summarizing what you repaid and what's outstanding.
Here's an example of a repayment plan:
- In 2017, Manishka withdraws $21,000 from her RRSP to use the HBP
- She must start repaying her RRSP no later than 2019 at the rate of $1,400 per year ($21,000 divided by 15)
- She can repay the money in lump sums or in regular payments ($1,400 divided by 12, for monthly payments of $116.67)
- At this rate, she'll finish repaying her RRSP by 2033 without triggering any income tax
Who qualifies for the Home Buyers' Plan?
If you buy, build or maintain a home for yourself, you should:
- Be a first-time home buyer; if you haven't owned a residence for more than 4 years, you may qualify; or at the time of the withdrawal, you’ve been:
- living separately and apart from your spouse for at least 90 days and started living separately and apart in the preceding 4 years (conditions apply)
- living in a principal residence that isn’t owned and occupied by a new spouse or common-law partner
- Use the home as your primary residence
- Buy, build or maintain a home in Canada
If you buy, build or maintain a home for a disabled relative, you should:
- Have a written agreement to buy, build or maintain a qualifying home for your relative
- Buy, build and maintain a home in Canada
Also, the home must be used as the disabled relative's main residence, and must better fit their needs than their current home.
In addition to the HBP, look for low-interest loans to help you buy a home. But if you have funds in an RRSP, the HBP can lower your mortgage and interest costs.
For more information about the HBP, go to What is the Home Buyers’ Plan (HBP)? and How to participate in the Home Buyers' Plan (HBP) on the CRA’s website.
In addition to the HBP, you may also qualify for the First Home Savings Account (FHSA) to save for your first home, tax-free. Learn more about how the FHSA compares to the HBP.
