Help for First Time Home Buyers

The Home Buyers' Plan (HBP) is a program that allows first time home buyers to withdraw up to $25,000 tax free from their RRSP and put it towards the purchase of their first home.

The RRSP contributions must remain in the RRSP for at least 90 days before that money is eligible to be withdrawn under the Home Buyers Plan.

You will have to make payment to your RRSPs each year until your HBP balance is zero. If you do not repay the amount due for a year, it will have to be included as income on your taxes for that year. The Canada Revenue Agency will send you a Notice of Assessment, which will indicate the amount of the loan you have repaid, the balance left to be repaid, and the amount due for your next payment.

In order to qualify for the Home Buyers Program:

  1. You must have a written agreement to buy or build a qualifying home for yourself or help a related person with a disability to buy or build their home.

  2. Your intention must be to make the qualified home your primary residence within one year of it being built or purchased.

  3. You must be considered a first-time home buyer, having not purchased a home within the previous 4 years.

  4. You must be a Canadian Resident.

  5. You cannot have owned the qualifying home for more than 30 days before the RRSP withdrawal is made.

  6. You have to receive all withdrawals in the same calendar year.

  7. You must buy or build the qualifying home before October 1 of the year after the year of the withdrawal.

If any of the conditions are not met while you are participating in the plan, your RRSP withdrawal will not be considered eligible. Consequently, you will have to include the money taken from your RRSP as income on your tax return for the year you received the money.

The HBP is considered a loan and therefore must be repaid. Participants have 15 years to repay the RRSP withdrawal without penalty, with the first payment due no later than two years after you first withdrew the money. You can begin repaying sooner and make higher payments without penalty.

If you are purchasing the qualifying home with your spouse or partner and you are both first time buyers, there can be a maximum of $50,000 available from your individual RRSPs that can be used. If one of the spouse/partners has previously owned a home and one is a first time buyer, only the first time buyer can take advantage of the maximum $25,000 withdrawal.

For more information on the Home Buyers Plan, call 1-800-O-Canada or visit the Canada Revenue Agency website at


There are no comments

Thank you! Your comment has been submitted and is awaiting approval.

The Hisey-McDermott Team

The Hisey-McDermott Team

Sales Representative
CENTURY 21 Miller Real Estate Ltd., Brokerage*
Contact Us

Blog Archives