Updated: April 2025  |  bremo.io financial guides

Canada Home Buyers' Plan (HBP) 2025

The Home Buyers' Plan (HBP) is a federal program that allows first-time home buyers in Canada to withdraw up to $35,000 from their RRSP tax-free to purchase or build a qualifying home. Couples where both partners qualify can withdraw up to $70,000 combined. It is one of the most significant tools available to Canadians saving for their first home.

How the HBP Works

Normally, withdrawing from an RRSP triggers immediate income tax. The HBP is an exception: you can withdraw up to $35,000 in a calendar year, pay no immediate tax on it, and use the funds toward a home purchase. The amount must be repaid to your RRSP over 15 years, with repayments beginning two years after the year you made the withdrawal.

Who Qualifies for the HBP?

To be eligible, you must:

• Be a first-time home buyer — meaning you have not owned a home that you occupied as your principal place of residence in the past four years
• Have a written agreement to buy or build a qualifying home
• Plan to occupy the home as your principal residence within one year of purchase or construction
• Be a Canadian resident at the time of the withdrawal and when the home is purchased
• Have RRSP funds that have been in the account for at least 90 days before the withdrawal

Note: the first-time buyer rule has exceptions. People with disabilities or those helping a related person with a disability purchase a home may qualify even if they've previously owned.

What Counts as a "Qualifying Home"?

A qualifying home is a housing unit located in Canada that you intend to occupy as your principal residence. This includes single-family homes, semi-detached homes, townhouses, condominiums, co-op housing units, and mobile homes.

How to Make an HBP Withdrawal

1. Have your RRSP funds in place for at least 90 days before withdrawal
2. Have a signed Agreement of Purchase and Sale (or building contract)
3. Complete CRA Form T1036 (Home Buyers' Plan Request to Withdraw Funds from an RRSP)
4. Submit the form to your RRSP issuer (bank or brokerage)
5. Receive the funds without withholding tax
6. Close on your home before October 1 of the year after the withdrawal

HBP Repayment Rules

The amount withdrawn must be repaid to your RRSP over 15 years. Repayments begin on the second year after the year you made the withdrawal. For example, if you withdrew in 2024, your first required repayment is due for the 2026 tax year (by March 1, 2027).

Each year the CRA calculates your required repayment as the outstanding HBP balance divided by the number of years remaining. If you miss a repayment, the amount not repaid is added to your taxable income for that year. There is no minimum repayment — you can repay more than required to reduce the outstanding balance faster.

Combining HBP with the First Home Savings Account (FHSA)

Starting in 2023, Canadians can also save through the First Home Savings Account (FHSA), which allows $8,000 per year (lifetime maximum $40,000) in tax-deductible contributions that can be withdrawn tax-free for a first home purchase. The FHSA can be used in combination with the HBP, giving first-time buyers access to both pools of savings.

Pros and Cons of the HBP

Advantages

• Tax-free access to your RRSP for a first home
• No immediate impact on your credit score
• Interest-free "loan" from yourself
• Can be combined with spousal RRSP for maximum withdrawal

Disadvantages

• Removes funds from tax-sheltered growth for up to 15 years
• Repayment obligations can strain cash flow
• Missed repayments are added to taxable income
• Requires existing RRSP savings to leverage