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                           The Home Buyer's Plan                        

The Home Buyer's Plan (HBP) is a program that allows you to withdraw up to $25,000 from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home. If you buy a qualifying home with your spouse or common-law partner, or with other individuals, each of you can withdraw up to $25,000.

NOTE: Budget 2019 proposes to increase the Home Buyers' Plan withdrawal limit to $35,000. This would be available for withdrawals made after March 19, 2019.


However, the program sets out certain conditions for participation. If an individual meets all the applicable Home Buyer's Plan conditions, the withdrawals will not have to be included in his or her taxable income, and the RRSP issuer will not withhold tax on these amounts.


Conditions must be met BEFORE you applying to withdraw funds from your RRSP under the Home Buyer's Plan:

  ● You have to be considered a first-time home buyer.

You are not considered a first-time home buyer if you or your spouse or common-law partner owned a home that you occupied as your principal place of residence beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before your withdrawal.

If at the time of the withdrawal you have a spouse or common-law partner, it is possible that only one of you will be considered a first-time homebuyer.

However, if you are a disabled person, or you are buying or building a home for a related disable person or helping such a person buy or build a home, you do not have to meet this condition.

  ● You have to enter into a written agreement to buy or build a qualifying home.

  ● You have to intend to occupy the qualifying home as your principal place of residence no later than one year after buying or building it.

  ● If you previously participated in the Home Buyer's Plan, you may be able to do so again. In this case your Home Buyer's Plan balance on January 1 of the year of the withdrawal must be zero.


If you participate in the HBP, certain rules limit your RRSP deduction for contributions you made to your RRSP during the 89-day period just before your withdrawal under the HBP. Under these rules, you may not be able to deduct all or part of the contributions made during this period for any year.

For contributions to be fully deductible that are made to an RRSP in the 89-day period just before an HBP withdrawal from that RRSP, the value of that RRSP after the withdrawal must be at least equal to those contributions


Generally, the Canada Revenue Agency does not allow withdrawing funds from a locked-in RRSP or LIRA.


It is the financial institution decision whether it allows early withdrawals from non-redeemable investments in your RRSP without penalty.


Conditions you have to meet when a withdrawal is made:

  ● Neither you nor your spouse or common-law partner can own the qualifying home more than 30 days before the RRSP withdrawal.

Jackie buys a qualifying home with a closing date of November 1, 2015.

She must make her request to withdraw funds from her RRSP under the HBP no later than 30 days after the closing date. Therefore, Jackie has until December 1, 2015, to file Form T1036 and make her withdrawal under the HBP.

If she makes a request to participate in the HBP after December 1, 2015, the withdrawals will not be considered eligible withdrawals and will have to be included in her income for the year she receives the funds.


Source: CRA website


  ● You have to be a resident of Canada.

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


Condition you have to meet after all your withdrawals have been made:

  ● Generally, you have to buy or build the qualifying home before October 1 of the year after the year of the withdrawal.


To make an eligible withdrawal under the Home Buyer's Plan, you have to use Form T1036, Home Buyers’ Plan (HBP) – Request to Withdraw Funds from an RRSP. After completing Area 1 of Form T1036, you give it to your RRSP issuer who will complete Area 2. Your RRSP issuer will not withhold tax from the funds you withdraw if you meet the applicable Home Buyer's Plan conditions. Your RRSP issuer will send you a T4RSP slip, Statement of Registered Retirement Savings Plan Income, showing the amount you withdrew under the Home Buyer's Plan. You have to attach this slip to your income tax Return.


Under the Home Buyer's Plan, you have to repay all withdrawals to your RRSPs within a 15-year period. Generally, in each year of your repayment period, you have to repay 1/15th of your original Home Buyers' Plan balance until the full amount is repaid.  Your repayment period starts the second year following the year that the funds were withdrawn. For example, if you withdrew funds from your RRSP in July 2003, you must pay at least 1/15th of the withdrawal in 2005 (or the first 60 days of 2006).  If you do not repay the amount due for a year, it will have to be included in your income for that year.


You will receive a Home Buyers’ Plan (HBP) Statement of Account each year with your Notice of Assessment or Reassessment. This statement will show the total Home Buyer's Plan withdrawals, the amount you have repaid to date, your Home Buyer's Plan balance, and the amount you have to repay the following year.


If you do not buy or build the qualifying home before October 1 of the year after the year of withdrawal, you can:

  • Buy or build a different home, called a replacement property, before October 1 of the year following the year of the withdrawal    or

  • Cancel your participation in the Home Buyer's Plan. When you cancel your participation in the plan, you must either repay the RRSP withdrawal in full by the due date or include any portion you did not repay in your income for the year you took the money out. Generally, when you cancel your participation in the HBP, you must repay in full your RRSP withdrawals by December 31 of the year after the year of the RRSP withdrawal. For example, if you withdraw funds from your RRSP in July 2015, you must repay this amount to your RRSP plan by December 31, 2016. To cancel your participation, you have to complete the Home Buyers’ Plan (HBP) – Cancellation form


If you have any questions or concerns feel free

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Revised: October 21, 2019