A federal program that allows first-time homebuyers to withdraw up to $60,000 from their RRSPs (Registered Retirement Savings Plans) to put toward a down payment on a home, tax-free. The withdrawn amount must be repaid to your RRSP over 15 years, starting the second year after the withdrawal. Both partners in a couple can each withdraw up to $60,000.
Why It Matters
The HBP is one of the most powerful tools available to first-time buyers in the GTA, where saving a down payment is a major hurdle. Combined with the First Home Savings Account (FHSA), it can significantly boost your down payment. Just remember: the money needs to be repaid, so factor those annual repayments into your budget.
Real-World Example
You and your partner are first-time buyers purchasing a condo in Mississauga for $575,000. You each withdraw $60,000 from your RRSPs under the HBP, giving you $120,000 tax-free toward your down payment. Combined with $20,000 in savings, you have $140,000 (about 24%) down -- enough to avoid mortgage default insurance entirely. Your annual HBP repayment is $4,000 each ($60,000 divided by 15 years), starting in your second year of ownership.
Ontario & GTA Context
The HBP is a federal program administered by the CRA, available to all Canadians regardless of province. However, Ontario first-time buyers can combine the HBP with provincial programs like the Ontario Land Transfer Tax Rebate (up to $4,000) for maximum benefit. The RRSP funds must have been in the account for at least 90 days before withdrawal. Note that the HBP withdrawal limit was increased from $35,000 to $60,000 in the 2024 federal budget.
How It Works in Practice
Plan your HBP withdrawal well in advance. Contribute to your RRSP at least 90 days before you plan to withdraw, and coordinate the withdrawal timing with your mortgage application. If you miss a repayment, the amount is added to your taxable income for that year.
Common Questions
Do I have to pay back the Home Buyers' Plan?▾
Can I use the HBP and FHSA together?▾
What qualifies as a first-time buyer for the HBP?▾
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