Home Buyers’ Plan Explained: Rules, Limits and Repayment
The Home Buyers’ Plan lets you take up to $60,000 out of your RRSPs to buy or build a first home with no tax withheld and nothing added to your income, and then put it back over 15 years. It is a loan from yourself, not a grant. The two things that decide whether it works for you are both about timing: whether you clear the four-year first-time buyer test on the day of the withdrawal, and when your repayment clock starts, which for a first withdrawal made in 2026 is not 2028 but 2031.
Figures current as of August 30, 2026. Every number below is sourced to the CRA page, form, or statutory provision that states it. Contribution and withdrawal limits are legislated and change.
The repayment relief question, resolved
Two CRA pages appear to describe the same temporary repayment relief with two different windows. They do not contradict each other. There are two measures.
The Home Buyers’ Plan hub page, last updated February 17, 2026, says the relief “was extended for participants making a first withdrawal between January 1, 2026, and December 31, 2028”, and then says the thing that settles it: “This measure extends the relief introduced in Budget 2024 which applies to withdrawals made between January 1, 2022, and December 31, 2025.”
The HBP repayment page, last updated January 20, 2026, describes only the first measure. Guide T4040 does the same and lists first-repayment years for withdrawal years 2021 through 2025 and no further. T4040 is the Rev. 25 edition, written for the 2025 tax year, and its page was last updated January 23, 2026.
Both of those pages predate the second measure. The extension for 2026 to 2028 withdrawals was proposed in the Spring Economic Update 2026, tabled April 28, 2026, which described it as extending “the grace period during which homeowners are not required to start repaying their Home Buyers’ Plan withdrawals from their Registered Retirement Savings Plan (RRSP) from two years to five years, for participants making a first withdrawal between January 1, 2026 and December 31, 2028”, and added that the same grace period “already applies to withdrawals made between 2022 and 2025”. It became law in Bill C-30, which received Royal Assent on June 19, 2026.
The statute confirms it is one continuous mechanism rather than two competing ones. Income Tax Act s. 146.01(4.1) applies where “the completion date in respect of an eligible amount received by an individual is after 2022 and before 2030”. Because the completion date is October 1 of the year after the year of the withdrawal, that range covers first withdrawals made in 2022 through 2028 inclusive, with no gap in the middle. Section 146.01 was last amended by 2026, c. 22, s. 6.
Conclusion: the repayment page and T4040 are stale, not wrong. They accurately describe the Budget 2024 measure and simply do not mention the one that followed it. The practical risk is real, though. Someone who makes a first withdrawal in 2026 and reads only the repayment page finds their year in neither of the two buckets that page describes, and may reasonably assume the default rule applies and start repaying in 2028. It does not, and they do not have to. If you are in that position, the figure that governs is the minimum required repayment on your own HBP statement of account in your CRA account, not a general web page.
What the HBP actually is
The CRA’s own description is short: a program that “allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a specified disabled person”. The withdrawal limit is $60,000, and you repay it over 15 years.
Three consequences follow, and they are the whole shape of the thing.
Nothing is withheld and nothing is taxed on the way out. Your issuer will not withhold tax on withdrawn amounts of $60,000 or less (How to participate in the Home Buyers’ Plan). An ordinary RRSP withdrawal of $60,000 would have 30% withheld and all of it added to your income. This one has neither. Our RRSP explainer covers what an ordinary withdrawal costs, and it is a lot.
You get no second deduction when you repay. A designated HBP repayment is not treated as an RRSP contribution at all. You cannot deduct it, which is the price of having deducted it the first time.
The money is out of the market while it is out of the plan. Fifteen years of forgone compounding on money that would otherwise be invested is the real cost of the HBP, and it does not appear on any tax slip. Whether that trade is worth it depends entirely on what the down payment buys you.
The limit was $35,000 until Budget 2024 raised it to $60,000, announced in the Department of Finance release Putting home ownership back within reach on April 11, 2024.
Every eligibility condition
The CRA sets these out on How to participate in the Home Buyers’ Plan. All of them must be met, and you, the participant, are the one who has to meet them.
1. You are a resident of Canada at the time of the withdrawal, and if you have not already acquired the home, you remain resident from the first withdrawal until the home is acquired. 2. You have a written agreement to buy or build a qualifying home at the time of the withdrawal. 3. You are a first-time home buyer, unless one of the exceptions below applies. 4. Your HBP balance is zero on January 1 of the year of the withdrawal, if you have participated before. 5. You intend to occupy the home as your principal place of residence no later than one year after buying or building it. 6. You did not acquire the home more than 30 days before the withdrawal. 7. You withdraw no more than $60,000 in total, and only from RRSPs where you are the annuitant.
Two things people assume are conditions and are not. There is no minimum age. There is no requirement that the money have been in the RRSP for any particular length of time, though the 89-day rule below can quietly cost you a deduction if it went in recently.
Two accounts are commonly unavailable. Locked-in RRSPs and group RRSPs normally do not permit HBP withdrawals, which for many people rules out the largest registered balance they have. This is a plan-level restriction, so check with the issuer before you plan around a number.
A written agreement means a written agreement
The CRA is explicit that “obtaining a pre-approved mortgage is not considered a written agreement to buy or build a qualifying home and therefore will not satisfy this condition.” The Definitions for Home Buyers’ Plan page says what a written agreement must contain: “the date the agreement was signed, the address of the qualifying home and the closing date.”
What counts as a qualifying home
A housing unit located in Canada, existing or under construction. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes or apartment buildings all qualify. So does a share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit in Canada. A share that only gives you a right of tenancy does not.
For a condominium unit, you are considered to own it the day you are entitled to immediate vacant possession. For a home under construction, it is considered built on the date it becomes habitable.
The four-year rule, exactly
This is the condition that disqualifies the most people, and the arithmetic is not what the phrase “four years” suggests.
The CRA’s definition:
> You will be considered to be a first-time home buyer if you did not, at any time in the current calendar year before the withdrawal (except the 30 days immediately before the withdrawal) or at any time in the preceding four calendar years, live in a qualifying home (or what would be a qualifying home if located in Canada) as your principal place of residence that either you owned or jointly-owned, or your current spouse or common-law partner (at the time of the withdrawal) owned or jointly-owned.
The CRA’s own worked date: for a withdrawal on July 31, 2025, the disqualifying period runs January 1, 2021 to June 30, 2025. The statute expresses the same end point more precisely, as “the 31st day before the particular time” (ITA s. 146.01(1), “regular eligible amount”, paragraph (e)).
Notice the shape. The lookback is four calendar years plus the elapsed part of the current one. It is not a rolling four years from today. That is why the CRA’s own example on the common mistakes page lands where it does: Sofia sold her home in 2022 and rented afterward, withdrew $60,000 in 2025, and was not eligible, because 2022 sits inside the January 1, 2021 window. The CRA’s verdict is that she “should have waited until 2027”. A home sold in 2022 costs her until 2027, which is five calendar years later, not four.
The participate page gives the same arithmetic twice more: a home sold in 2019 means you may be able to participate in 2024, and a home sold in 2020 means 2025.
What “lived in a home you owned” actually requires
Both halves. The statute defines an “owner-occupied home” at s. 146.01(2)(a.1) as a housing unit or co-op share the individual owns, jointly or otherwise, and that “is inhabited by the individual as the individual’s principal place of residence at that time”.
So on the face of the statute, a rental property you owned but never lived in is not an owner-occupied home, and living in a home you did not own is not one either. The CRA’s prose collapses this into “lived in a home that you owned”, which is accurate but reads to many people as either condition alone. Both have to be true at the same time.
The spouse clause, and the limit on it
Your current spouse’s or common-law partner’s home counts against you. The CRA’s Jaspreet example is squarely this: she had never owned a home, had lived for two years in a condo her common-law partner Mark owns, and was not a first-time home buyer. Her $40,000 withdrawal was treated as an ordinary taxable RRSP withdrawal.
The statute is narrower than the web page in one respect worth knowing. Paragraph (f) of “regular eligible amount” disqualifies you where your spouse or partner had an owner-occupied home in the lookback period “that was inhabited by the individual during the spouse’s or common-law partner’s marriage or common-law partnership to the individual”. The home has to have been lived in by you, and lived in while the two of you were partners. A home your current partner owned and lived in before you were together, and which you never occupied, does not on that wording bar you. This is a statutory reading, not something the CRA states in these terms, so it is a question to put to the CRA or a tax professional rather than a conclusion to act on unaided.
Two ways past the first-time buyer test
A disability. You do not have to meet the first-time buyer condition if you are a specified disabled person making a withdrawal to buy or build a qualifying home, or if you are making the withdrawal for the benefit of a specified disabled person or to help one buy or build. The home must enable that person “to live in a more accessible dwelling or in an environment better suited to the personal needs and care” of that person. More on this below.
A separation. You do not have to meet it if you live separate and apart from your spouse or common-law partner at the time of the withdrawal and began living separate and apart in the year of the withdrawal or in any of the four preceding years. There are conditions attached, and they are covered in their own section below.
HBP, FHSA and the home buyers’ amount define “first-time buyer” three different ways
This is the single most common source of confusion in the whole area, and it is not the reader’s fault. Three federal measures use the same phrase for three different tests, and the CRA states each one on a different page.
| HBP withdrawal | FHSA: opening an account | FHSA: qualifying withdrawal | Home buyers’ amount (line 31270) | |
|---|---|---|---|---|
| Lookback period | Current calendar year before the withdrawal, except the 30 days immediately before it, plus the preceding 4 calendar years | This calendar year plus the previous 4 calendar years | Current calendar year before the withdrawal, except the 30 days immediately before it, plus the previous 4 calendar years | The year of acquisition plus the four preceding years |
| Test | Owned or jointly owned and lived in as principal residence | Owned or jointly owned and lived in as principal residence | Owned or jointly owned and lived in as principal residence | Lived in another home you or your spouse owned |
| Does a home your spouse or partner owns count against you? | Yes | Yes | No | Yes |
| Waived for a person with a disability? | Yes, for a specified disabled person | No | No | Yes, for someone eligible for the disability tax credit |
| Measured as of | The date of the withdrawal | The date you open the account | The date of the withdrawal | The year of acquisition |
Sources: Definitions for Home Buyers’ Plan, How to participate in the Home Buyers’ Plan, Opening your FHSAs, Withdrawals and transfers out of your FHSAs, Line 31270 Home buyers’ amount.
The row that produces the strangest real-world outcome is the third one. The FHSA withdrawal test has no spouse clause, and the CRA says so directly: a first-time home buyer “for the purpose of making a qualifying withdrawal is different from a ‘first-time home buyer’ for the purpose of opening an FHSA”.
The CRA’s Joshua example shows what that means. Joshua opened an FHSA in April 2025 with $8,000, married Lisa in May 2025, moved into a condo Lisa had owned since 2022, and then bought a home jointly with her. His FHSA withdrawal qualified, and the CRA’s stated reason is that living in a condo his wife owns “is not relevant in determining whether Joshua can make a qualifying withdrawal”.
Run Joshua through the HBP instead and he fails. The participate page says it in terms: where “your current principal place of residence is a home owned and occupied by a new spouse or common-law partner, you will not be able to make a withdrawal under the HBP.”
So a person who marries a homeowner after opening an FHSA can empty the FHSA tax-free for the joint purchase while being locked out of the HBP for that same purchase. Same buyer, same house, same day, opposite answers. Our FHSA explainer covers that account’s own rules in full.
The 89-day rule, and why it is not the 90-day rule
Contributing to an RRSP and then withdrawing it under the HBP shortly afterward is a well-known trick and a partly broken one. The window is 89 days, not 90, and the mechanic is not what the folk version says.
The CRA sets it out on How to make withdrawals:
> You cannot deduct the amount by which the total of your contributions during the 89-day period to your RRSP is more than the fair market value of that RRSP after the withdrawal.
Read that carefully, because it is more forgiving than “contributions in the last 90 days are not deductible”. The disallowed amount is only the excess of those contributions over what is left in that RRSP after the HBP money comes out. The CRA states the test the other way round on the same page: “for contributions made to an RRSP in the 89-day period to be fully deductible, the value of that RRSP after you made a withdrawal under the HBP must be at least equal to those contributions.”
A worked version. Suppose an RRSP holds $20,000, you contribute $15,000 in February, and you withdraw $30,000 under the HBP in April.
- Contributions in the 89-day period: $15,000
- Fair market value of that RRSP just after the withdrawal: $35,000 minus $30,000, so $5,000
- Non-deductible: $15,000 minus $5,000, so $10,000
Leave $15,000 or more in the plan after the withdrawal and the whole contribution stays deductible. Empty the account and the whole contribution is lost as a deduction, for any year, permanently.
Three details that catch people:
- The calculation is per RRSP and per withdrawal. The CRA says to “make a separate calculation for each withdrawal made under the HBP”. Contributions to a different RRSP than the one you draw from are not caught.
- The same rule applies to spousal contributions. If you contributed to your spouse’s or common-law partner’s RRSP in the 89 days before they made their HBP withdrawal from that same RRSP, your deduction is restricted the same way.
- Where both partners contributed to the same RRSP in that window, the earliest contributions are the non-deductible ones, per footnote 3 on the CRA’s page.
Guide T4040 states the rule for both the HBP and the Lifelong Learning Plan in the same sentence, and also uses 89 days.
Making the withdrawal: Form T1036
Every HBP withdrawal needs its own Form T1036, Home Buyers’ Plan (HBP) Request to Withdraw Funds from an RRSP. You fill out Area 1 and give the form to your RRSP issuer, who fills out Area 2. The issuer keeps it. You do not send it to the CRA, but the CRA can ask you about it later, and it is your responsibility that every condition is met.
Area 1, Part A is an eight-question decision tree, and it is the most precise public statement of the eligibility rules anywhere, more so than the prose pages. It is worth walking through before you sign anything. The questions cover residency, the written agreement, whether you have participated before, whether your previous HBP balance was nil on January 1, your intention to occupy, whether anyone acquired the home more than 30 days before the withdrawal, the specified disabled person routes, the four-year ownership test, and then the separation branch.
The CRA lists providing false information on Form T1036 as one of its five common HBP mistakes, and its example is not subtle: Myriam and Guy each withdrew $60,000 to buy a rental property and ticked the box saying they intended to live in it. Both withdrawals became ordinary taxable RRSP withdrawals, with the possibility of penalties and interest on top.
The withdrawal window is narrow
You can make more than one withdrawal, but only within a tightly defined period. The CRA: “you are only permitted to make those withdrawals in the same calendar year as your first withdrawal, and in January of the following calendar year. You are not permitted to make withdrawals outside this period unless expressly permitted by the Minister.”
The January extension exists because of a deeming rule in the statute. Section 146.01(2)(d) treats an amount received in January of a year as having been received at the end of the preceding calendar year, where it would otherwise fail the nil-balance test. That is what allows a January top-up without your zero-balance-on-January-1 condition destroying it.
Anything you withdraw beyond $60,000 is reported as income for the year you received it, and the issuer withholds tax on the excess at the time of the withdrawal.
The deadline to buy or build
You have to acquire or build the qualifying home, or a replacement property, before October 1 of the year after the year of your first withdrawal. The statute calls that the completion date, defined as “October 1 of the calendar year following the calendar year in which the amount was received”.
Withdraw in March 2026 and you have until September 30, 2027. That is the real deadline, and it is the same date whether you withdrew in January or in December of 2026.
Two extensions exist, and they are worth knowing before you panic.
A further year, if you have another agreement in hand. If you have another written agreement before that October 1 date to acquire the qualifying home or a replacement property before October 1 of the second year after your first withdrawal, the CRA still considers you to have met the deadline.
A construction alternative. If the home or replacement property is being built, you meet the deadline instead by having made payments to arm’s length contractors or suppliers, for materials or toward construction, at least equal to your total HBP withdrawals, made between the date of your first withdrawal and before that October 1 date.
If neither applies and you do not buy or build, you must cancel your participation. That is covered below.
Replacement property
A replacement property has to meet the same conditions as a qualifying home, and the statute adds that neither you, your spouse or partner, nor a specified disabled person or their spouse can have acquired it before you agreed to acquire or began building it. To tell the CRA you are buying or building a replacement property, you send a letter to the Sudbury or Winnipeg tax centre depending on where you live, with your name, address, social insurance number, the address of the replacement property, and a statement that you intend to occupy it as your principal place of residence within one year. The addresses are on the participate page.
When the repayment clock starts
Three regimes now exist. Which one applies to you is decided entirely by the year of your first withdrawal.
| Year of first withdrawal | Repayment starts | First repayment year, worked | Authority |
|---|---|---|---|
| Before January 1, 2022 | Second year after the withdrawal year | 2020 withdrawal, first repayment 2022 | HBP repayment page |
| January 1, 2022 to December 31, 2025 | Fifth year after the withdrawal year | 2022 withdrawal, first repayment 2027 | HBP repayment page; Guide T4040 |
| January 1, 2026 to December 31, 2028 | Fifth year after the withdrawal year | 2026 withdrawal, first repayment 2031 | HBP hub page; Bill C-30 |
| January 1, 2029 onward | Second year after the withdrawal year, unless extended again | 2029 withdrawal, first repayment 2031 | Derived from ITA s. 146.01(4.1), which stops at completion dates before 2030 |
Guide T4040’s own list gives the middle band year by year: 2022 to 2027, 2023 to 2028, 2024 to 2029, 2025 to 2030. The hub page gives the third band’s anchor: 2026 to 2031.
The last row is arithmetic from the statute rather than a CRA statement, and it deserves the caution. Section 146.01(4.1) applies only where the completion date is “before 2030”, which is the completion date for a 2028 withdrawal and not for a 2029 one. The relief has been extended twice already. Whether it is extended a third time is a legislative question, not a tax one.
How the statute produces those dates
For anyone who wants to check the arithmetic rather than take it on trust, the mechanism sits in two provisions.
Subsection (4.1)(c) reads the words “first calendar year” in the description of D in subsection (4) as “fourth calendar year”. D is measured from January 1 of that year after the completion date. For a 2026 withdrawal, the completion date is October 1, 2027, and the fourth calendar year beginning after it is 2031.
Subsection (4.2) then lists, year by year, the combinations of taxation year and completion date for which the income inclusion is switched off. For a 2026 withdrawal with an October 1, 2027 completion date, it is switched off in 2028, 2029 and 2030, and 2031 is the first year not on the list. That is the same answer the CRA’s hub page gives in a sentence.
The 15-year schedule, worked
The annual minimum is your HBP balance divided by the number of years remaining in the repayment period. A full $60,000 repaid exactly on schedule is $4,000 a year for 15 years, which is the figure the Spring Economic Update used when it costed the extension as “cash flow relief of up to $4,000 (1/15 of $60,000) per individual per year”.
Here is a full $60,000 withdrawal made in 2026, with the first repayment year of 2031, run through a missed year and an overpayment so you can see how the schedule reacts.
| Year | Years left | Opening HBP balance | Minimum required | Repaid | Added to income, line 12900 | Closing balance |
|---|---|---|---|---|---|---|
| 2031 | 15 | $60,000 | $4,000 | $4,000 | $0 | $56,000 |
| 2032 | 14 | $56,000 | $4,000 | $0 | $4,000 | $52,000 |
| 2033 | 13 | $52,000 | $4,000 | $4,000 | $0 | $48,000 |
| 2034 | 12 | $48,000 | $4,000 | $10,000 | $0 | $38,000 |
| 2035 | 11 | $38,000 | $3,454.55 | $3,454.55 | $0 | $34,545.45 |
Built using the CRA’s stated method, “divide your HBP balance by the number of years remaining in your repayment period”, on the HBP repayment page, and following the structure of that page’s own Example 2, which runs a $30,000 2023 withdrawal from a 2028 first repayment year. Dollar figures here are arithmetic, not CRA figures.
Two things in that table are worth pausing on.
Missing a year does not raise later minimums. In 2032 nothing was repaid, $4,000 went onto line 12900 as income, and the HBP balance dropped by $4,000 anyway. In 2033 the minimum is $52,000 over 13 years, which is still $4,000. The schedule is undisturbed. What you lost is the tax deferral on $4,000, at whatever your marginal rate was that year, permanently.
Overpaying does lower later minimums. The $10,000 paid in 2034 drops the balance to $38,000 with 11 years left, and the minimum falls to $3,454.55 for the rest of the term. The CRA confirms this directly: “If you repay more than the minimum required annual repayment for a particular year, your minimum required repayments for later years will be reduced.”
The asymmetry is the point. Paying extra buys you a permanently lower obligation. Paying nothing buys you a one-year tax bill and changes nothing else. Neither shortens the 15 years, and both leave you making payments until the balance is nil.
Repaying early, before your first required year, also works and does not move the start of the repayment period. The CRA: “Any repayments made before you are required to start your repayments will reduce the amount you have to repay for the first year”, and anything above that first-year requirement reduces the balance and the minimums for the rest of the term.
The statutory formula behind all of it
For completeness, subsection 146.01(4) computes the income inclusion as `[(A – B – C) / (15 – D)] – E`, where A is total eligible amounts received in prior years, B is total amounts previously designated as repayments, C is total amounts previously included in income, D counts elapsed years and is capped at 14, and E is what you designate this year. `(A – B – C)` is your HBP balance and `(15 – D)` is the years remaining, which is exactly the CRA’s plain-language rule. Because D is capped at 14, the divisor in the final year is 1 and the entire remaining balance falls due.
Designating a repayment: a contribution is not automatically a repayment
This is where people lose money quietly, because nothing goes wrong at the bank.
Two separate steps are required. Contribute to your RRSP, PRPP or SPP in the repayment year or in the first 60 days after it. Then designate all or part of that contribution as an HBP repayment on line 24600 of Schedule 7, filed with your return.
Skip the second step and the CRA has no way to know your contribution was meant as a repayment. It becomes an ordinary contribution consuming ordinary deduction room, and you are recorded as having missed the repayment, with the minimum going onto line 12900 as income.
The reverse also holds, and it is the compensation for the trouble. Repayments do not affect your RRSP deduction limit. You can designate a repayment even if your deduction limit is zero. The CRA does not consider these amounts to be RRSP contributions at all, which is precisely why you cannot claim a deduction for them.
The reporting mechanics differ between the first year and the rest. Per the reporting page: fill out Part E of Schedule 7 in the year of your first withdrawal, and Part B in every year after. And you must file a return every year until the balance is repaid or included in income, “even if you have declared bankruptcy or do not owe any tax”.
What cannot be designated as a repayment
The list on the repayment page is longer than most people expect. You cannot designate:
- contributions to your spouse’s or common-law partner’s RRSP or SPP, or that they make to yours
- amounts transferred directly to your RRSP, PRPP or SPP from an RPP, DPSP, RRIF, FHSA, SPP, or another RRSP or PRPP
- amounts withdrawn to have a provisional past service pension adjustment approved and then re-contributed, where you can claim a deduction
- amounts designated as a Lifelong Learning Plan repayment for the year
- first-60-day contributions you already deducted on the previous year’s return
- amounts already designated as an HBP or LLP repayment for the previous year
- retiring allowances and similar amounts received in the repayment year and transferred to your RRSP, PRPP or SPP and deducted
The FHSA entry catches a particular plan. You cannot repay your HBP withdrawals into your FHSA, and an FHSA-to-RRSP transfer cannot be designated as a repayment either. The money has to arrive in the RRSP as a fresh contribution.
Your annual HBP statement of account comes with your notice of assessment or reassessment, or on Form T1028, and shows what you have designated so far, your remaining balance, and next year’s required repayment. It is available in your CRA account, and it accounts for any extra payments you made.
Buying with a spouse or partner
Both of you can participate, and the limit is not shared.
The $60,000 cap attaches to the individual. The statute puts it as a condition on the withdrawal that “the total of the amount and all other eligible amounts received by the individual in the calendar year that includes the particular time does not exceed $60,000″ (ITA s. 146.01(1), “regular eligible amount”, paragraph (h)). Nothing in the section aggregates spouses.
So two partners who each meet every condition, each from their own RRSPs, can bring up to $120,000 between them to the same purchase. The CRA does not state that combined figure anywhere I could find, and it follows from the per-individual wording rather than from a CRA statement, but the underlying rule is not ambiguous: each of them is a separate individual with a separate $60,000 ceiling, a separate T1036, a separate participation period and a separate 15-year repayment schedule.
Each must qualify independently. If one of you fails the four-year test, that person cannot withdraw and the other still can. The CRA’s Jaspreet example is exactly this situation seen from the failing side: Mark was ineligible, Jaspreet assumed she was not, and she was wrong for a different reason.
The equivalent FHSA rule is stated explicitly by the CRA, which is a useful contrast. Its Kara and Stephen example has two partners each making a qualifying FHSA withdrawal, of $40,500 and $41,000, for the same jointly purchased home. Between an FHSA each and the HBP each, a couple who has done everything right can assemble a very large down payment. Whether they should is a separate question, and one our comparison of which account comes first takes up.
Persons with disabilities and the related-person rules
The HBP has a second, wider door, and it is the least-known part of the program.
You do not have to be a first-time home buyer where the withdrawal is made either by a specified disabled person to buy or build a qualifying home for themselves, or by someone else to buy or build a qualifying home for the benefit of a specified disabled person, or to help such a person buy or build one. The home must “enable the specified disabled person to live in a more accessible dwelling or in an environment better suited to the personal needs and care of the specified disabled person”.
The definitions page sets out who counts. A specified disabled person, in respect of an individual, is a person who is the individual or is related to the individual, and who either:
- is entitled to the disability amount at line 31600 at the time of the HBP withdrawal, or
- would have been entitled to it had they not claimed attendant care or nursing home costs as medical expenses.
If the person was not entitled to the disability amount in any earlier year, filing a Form T2201, Disability Tax Credit Certificate, certified by a medical practitioner, for the year of the withdrawal is enough to treat them as entitled. But the CRA attaches a hard consequence: “If Form T2201 is not approved, your withdrawals will not be considered eligible withdrawals under the HBP, and will have to be included in your income for the year you receive them.” Withdrawing on the strength of an unapproved T2201 puts the entire withdrawal at risk of being taxed.
“Related” carries its ordinary Income Tax Act meaning here. The definitions page describes related persons as those “connected by blood relationship, marriage, common-law partnership or adoption (legal or in fact)” and notes that related persons are not considered to deal with each other at arm’s length. A parent can therefore withdraw under the HBP to help a disabled adult child into a suitable home without ever having been a first-time buyer themselves.
Two limits still bite. The $60,000 ceiling is unchanged, and it is a combined ceiling: the statutory cap in the “supplemental eligible amount” definition counts “the amount and all other eligible amounts received by the individual” in the year, so withdrawing for yourself and for a disabled relative in the same year shares one $60,000 limit. And every other condition, including residency, the written agreement, the intention to occupy and the repayment obligation, still applies in full.
Separation and divorce
Since 2019, someone who is not a first-time buyer can still use the HBP after a relationship breaks down. The route is real but conditional, and Form T1036 sets it out more clearly than any prose page does, in questions 8a through 8e.
To use it, all of the following must hold:
1. You have been living separate and apart from your spouse or common-law partner because of a breakdown of the relationship for at least 90 days at the time of the withdrawal, and you began living separate and apart in the year of the withdrawal or in the four preceding calendar years. 2. You do not have a new spouse or common-law partner who owns and occupies a home that is your principal place of residence. This is the bar that catches people. Moving in with a new partner who owns their home closes the door again. 3. If you own and occupy a home as your principal place of residence, either the qualifying home you are buying is a different home, or you are acquiring your separated partner’s interest in the one you are in.
Where you keep the old home, there is a disposal obligation. The CRA: “If you currently own your previous principal place of residence, you will be required to dispose of the previous principal place of residence no later than two years after the end of the year in which the withdrawal is made.” That requirement is waived if you buy out your partner’s share of the residence, and in that case the usual rule against acquiring the home more than 30 days before the withdrawal is also waived.
The statute at s. 146.01(2.1) constructs this by deeming you and your former partner not to have had an owner-occupied home, and adds a matching rule: where you acquire your former partner’s interest in the home, you are deemed to have acquired a qualifying home on the date you acquired that interest.
There is also a matching cancellation right. You can cancel your participation if you made the withdrawal following a relationship breakdown and both of these are true: you did not dispose of the owner-occupied home before the end of the second calendar year after the year of your first withdrawal, and you did not acquire your partner’s interest in it. Cancellation payments in that case are due by December 31 of that second calendar year.
What happens on death
The default is an income inclusion. The legal representative has to include the participant’s remaining HBP balance in the participant’s income for the year of death, reduced by any RRSP contributions made before death and designated as an HBP repayment for the year of death. This is s. 146.01(6) and the CRA’s repayment page states it the same way.
The election that avoids it. If the participant had a spouse or common-law partner resident in Canada at the time of death, that person and the legal representative can jointly elect to have the survivor make the repayments instead. The income inclusion then does not apply. The election is made by attaching Form RC98, Election to transfer the Home Buyers’ Plan (HBP) or Lifelong Learning Plan (LLP) balance at time of death, or a signed letter, to the deceased’s final return. The letter must state that the survivor is electing to continue the repayments and that the income inclusion is not to apply.
What the survivor takes on depends on their own position:
- The survivor already had their own HBP. The two balances merge, and the revised balance is repaid over the number of years remaining in the survivor’s own repayment period. The CRA adds a helpful assurance: there are no adverse tax consequences if the combined balance exceeds the survivor’s own $60,000 withdrawal limit.
- The survivor did not have their own HBP. The deceased’s balance is repaid over the years remaining in the deceased’s participation period. The survivor is then treated as an HBP participant, which means they cannot make an HBP withdrawal of their own until that balance is fully repaid and they meet every other condition. This is a real cost, and it is easy to miss: electing to take over a late partner’s balance can lock the survivor out of the HBP for their own next purchase.
One relief the CRA notes: if the deceased had not made a repayment for the year of death and the election is made, the minimum required repayment for that year is not required. The survivor picks up the schedule in subsequent years.
If you become a non-resident
The rules split on whether you had already bought the home.
Before you buy or build. You must either cancel your participation, or report the amount you did not repay on line 12900 for the year you made the withdrawals. If you were already a non-resident when you filed the return for the year of your first withdrawal, cancellation payments are due by the earlier of December 31 of the year after your first withdrawal, and the day you filed that return.
After you buy or build. You cannot cancel. You must either repay the remaining HBP balance by the earlier of the day you file your return for the year you became a non-resident and 60 days after becoming a non-resident, or include the remaining balance as RRSP income on line 12900 for that year.
The statute matches, at s. 146.01(5), which brings the outstanding total into income for the resident part of the year, less anything designated in respect of payments made within 60 days and before the return was filed.
The RRSP itself survives emigration untouched. It is the HBP balance sitting inside it that comes due. Our RRSP explainer covers the wider non-resident treatment of the plan.
If you turn 71 with a balance outstanding
You cannot contribute to an RRSP, PRPP or SPP after the end of the year you turn 71, so you cannot repay an HBP after that either. In the year you turn 71 you have three choices:
- Repay the balance in full. Clean.
- Repay part of it. Your remaining balance at the beginning of the year you turn 72 is divided by the years remaining in your repayment period, and that amount goes onto line 12900 each year until it runs out.
- Repay nothing. Your balance at the beginning of the year you turn 71 is divided by the years remaining, with the same annual income inclusion.
There is no penalty in any of these. It is simply a schedule of taxable income you no longer control the timing of.
Cancelling your participation
You generally cannot cancel an HBP withdrawal once you have made it and met the conditions. The cancellation page lists the only situations where you can:
- you did not buy or build a qualifying home or replacement property
- you became a non-resident before buying or building one
- the parallel cases where the withdrawal was for a specified disabled person and that person did not buy or build
- the marriage or common-law breakdown case described above
The CRA’s Lina example is a warning about assuming otherwise. Lina withdrew $35,000 in 2022 for a condo under construction, grew frustrated with delays, returned the money and filed an RC471, then withdrew $60,000 again in 2024 when the condo was ready. She was never entitled to cancel, because she still intended to take possession. Her first withdrawal stayed valid, the $35,000 she returned was treated as a new RRSP contribution with over-contribution risk attached, and the new $60,000 became an ordinary taxable withdrawal. The CRA’s advice is blunt: she “should have contacted the CRA before trying to repay her first withdrawal into her RRSP.”
If you are entitled to cancel, the mechanics are:
1. Make the cancellation payment to any of your existing RRSPs, or a new one for yourself, by the due date. It cannot go to a PRPP, an SPP, or your spouse’s plans. 2. Send Form RC471 or a signed letter to the CRA, received no later than 60 days after the cancellation payments were due. 3. Attach your cancellation payment receipts.
A cancellation payment is not an RRSP contribution, must not be entered in Part A of Schedule 7, and is not deductible. Anything you fail to repay by the due date goes onto line 12900 for the year of the withdrawal.
Due dates: generally December 31 of the year after your first HBP withdrawal, extended to December 31 of the second calendar year where you obtained the one-year extension to acquire or build.
Using the HBP and an FHSA together
You can use both for the same home. This is settled and the CRA says so in three separate places.
On the HBP hub page:
> You can withdraw amounts from your RRSP under the HBP and make a qualifying withdrawal from your first home savings account (FHSA) for the same qualifying home, as long as you meet all of the conditions at the time of each withdrawal.
On the FHSA withdrawals page, in almost the same words. And, most usefully of all, in a note printed on the face of Form T1036 itself, the form your bank hands you when you make the withdrawal.
That last one matters. If an adviser or an institution tells you that you have to choose, the correction is on the form in front of you.
Where the “you must choose one” claim came from
It was true of a proposal that never became law. The Department of Finance’s August 2022 backgrounder on the design of the FHSA proposed that an individual would not be permitted to make both an FHSA withdrawal and an HBP withdrawal for the same qualifying home purchase. That proposal did not survive into the enacted legislation. Canada.ca has since archived the backgrounder with an editorial note stating that the FHSA was enacted by Bill C-32, that the enacted rules differ from the August 9, 2022 proposal in a number of ways, and that the enacted rules permit the FHSA and the Home Buyers’ Plan to be used together for the same qualifying home purchase.
Advice repeating the old position is not lying. It is quoting a four-year-old proposal. Check the date on anything that says you must choose.
How the two actually differ
| Home Buyers’ Plan | FHSA | |
|---|---|---|
| What it is | A withdrawal from your own RRSPs | A separate registered account |
| Maximum | $60,000 per individual | $40,000 lifetime contributions, plus growth |
| Deduction going in | Yes, when you contributed to the RRSP | Yes, on contributions |
| Tax on the way out | None, if conditions met | None, if conditions met |
| Repayable | Yes, over 15 years | No, ever |
| Growth you withdraw | Comes back out of the RRSP as part of the balance | Comes out tax-free and is never repaid |
| Room after a withdrawal | Not restored; the RRSP room was used when you contributed | Not restored |
| Does a spouse’s home block you? | Yes | Blocks opening the account, not the withdrawal |
| Annual room accrues before you act? | RRSP room accrues from earned income whether or not you act | No. FHSA room starts only when you open an account |
| Hard deadline | Buy or build before October 1 of the year after the first withdrawal | Close by the earliest of the 15th anniversary, age 71, or the year after the first qualifying withdrawal |
Sources: The Home Buyers’ Plan, How to participate in the Home Buyers’ Plan, Definitions for FHSAs, Participating in your FHSAs, Withdrawals and transfers out of your FHSAs.
The row that decides most sequencing arguments is the repayable row. HBP money leaves a 15-year obligation behind it. FHSA money does not. Where a buyer can only fund one, the FHSA is the one with no strings, and its room only starts accruing once an account exists, which is why opening an empty one costs nothing and waiting costs something. That argument is worked through in the FHSA explainer and in FHSA vs TFSA vs RRSP: Which Account Comes First?.
One direction is closed. You cannot repay an HBP balance into an FHSA, and an FHSA-to-RRSP transfer cannot be designated as an HBP repayment. The two accounts feed the same purchase but not each other.
A separate thing entirely: the home buyers’ amount
People conflate the HBP with the home buyers’ amount at line 31270, which is a different measure with a different eligibility test.
It is a non-refundable tax credit of up to $10,000 for the purchase of a qualifying home. At the lowest federal rate of 14% for 2026, that is worth up to $1,400 in reduced federal tax. The rate is from Current year tax rates and income brackets (2026); the multiplication is ours. Being non-refundable, it does nothing if you have no tax payable.
Three points of difference from the HBP:
- It is a credit, not a withdrawal. You do not need an RRSP and there is nothing to repay.
- Its first-time buyer test looks at “the year of acquisition or in any of the four preceding years”, not the current-year-before-the-withdrawal formulation the HBP uses.
- It can be split between eligible spouses or partners, or between any eligible people who jointly acquired the home, so long as the total claimed for one home does not exceed the annual maximum. If only one partner is eligible, that partner claims the full amount and it cannot be split.
Like the HBP, it waives the first-time buyer requirement for a person eligible for the disability tax credit, or for someone acquiring the home for the benefit of a related person who is.
The mistakes people actually make
The CRA publishes five, with worked examples. They are worth reading as a set, because four of the five end with the same outcome: the withdrawal is reclassified as ordinary RRSP income, the amount is added to taxable income for the year, the person may be pushed into a higher bracket, they need contribution room to put it back, and penalties and interest may follow if the error is not caught quickly.
Failing the four-year test and not realising it. Sofia, who sold in 2022 and withdrew in 2025. She needed to wait until 2027.
Forgetting the spouse’s home. Jaspreet, who had never owned anything but lived in her partner’s condo.
Withdrawing again with a balance outstanding. Alex withdrew $25,000 in 2015, had repaid only $15,000 by 2025, and withdrew another $60,000. The whole $60,000 became taxable. What he needed was to clear the $10,000 by contributing in 2024 or the first 60 days of 2025 and designating it as an HBP repayment on his 2024 return. Note the mechanism there: it is the designation for the previous year, made in the first 60 days, that gets your balance to zero as of January 1.
Cancelling when you are not entitled to. Lina, whose condo was merely delayed. Contact the CRA before returning money to an RRSP as a cancellation.
Signing a T1036 that is not true. Myriam and Guy and the rental property.
Two more that are not on the CRA’s list but come straight out of the rules:
Contributing and withdrawing in the same breath. The 89-day rule can cost you the deduction on a contribution you made specifically to fund the withdrawal. Leave enough in that RRSP after the withdrawal to cover the contribution.
Contributing without designating. A repayment that is not designated on Schedule 7 is not a repayment. The bank will not tell you.
Frequently asked questions
How much can I take out of my RRSP under the Home Buyers’ Plan? Up to $60,000. The limit is per individual, so two partners who each meet every condition can each withdraw up to $60,000 from their own RRSPs for the same home. Anything above $60,000 is taxable in the year received and has tax withheld at source.
When do I have to start repaying? It depends on the year of your first withdrawal. Before 2022, the second year after. For first withdrawals from 2022 through 2025, and again from 2026 through 2028, the fifth year after. A first withdrawal in 2026 means a first repayment year of 2031.
What is the annual repayment? Your HBP balance divided by the years remaining in the repayment period. A full $60,000 repaid on schedule is $4,000 a year for 15 years.
What happens if I miss a repayment? The shortfall between what you designated and the minimum required goes onto line 12900 of your return as RRSP income for that year, and your HBP balance is reduced by that amount. It is not a penalty and it does not raise your later minimums. It is a taxable withdrawal you did not choose the timing of.
Can I use the HBP and an FHSA for the same home? Yes. The CRA states it on the HBP page, on the FHSA withdrawals page, and on Form T1036 itself. The widespread claim that you must choose one traces to an August 2022 Department of Finance proposal that was never enacted.
I have never owned a home. Why am I not a first-time buyer? Most likely because you lived in a home your current spouse or common-law partner owned, at some point in the current calendar year or the previous four. The HBP test counts a partner’s home against you. The FHSA withdrawal test does not.
I sold my house four years ago. Can I use the HBP now? Check the calendar years rather than the elapsed time. The disqualifying window is the current calendar year before the withdrawal plus the four preceding calendar years. A home sold in 2022 keeps you out until 2027, which is five calendar years later.
Can I use a locked-in RRSP? Normally no. Locked-in and group RRSPs generally do not permit HBP withdrawals. Ask your issuer before you plan around the balance.
Does an HBP repayment give me a tax deduction? No. A designated repayment is not treated as an RRSP contribution and cannot be deducted. The compensation is that it does not use any deduction room either, so you can repay even with a deduction limit of zero.
Can I repay into my FHSA? No. The CRA states this directly. Repayments must go into an RRSP, PRPP or SPP, and a transfer from an FHSA cannot be designated as a repayment.
Do I have to be a first-time buyer if the home is for someone with a disability? No. The first-time buyer condition is waived where the withdrawal is made by, or to help, a specified disabled person, and the home must let that person live somewhere more accessible or better suited to their needs. If you rely on a Form T2201 that is not ultimately approved, the withdrawal becomes taxable.
Can I use the HBP after a separation even though I own a home? Possibly. You must have been living separate and apart for at least 90 days at the time of the withdrawal, having begun in the year of the withdrawal or the four preceding years, you must not have a new partner who owns and occupies your principal residence, and you must either buy a different home or acquire your former partner’s interest in the current one. Keeping the old home carries an obligation to dispose of it within two years after the end of the year of the withdrawal.
What happens to my HBP balance if I die? It goes into your income for the year of death, unless your surviving spouse or common-law partner, resident in Canada, jointly elects with your legal representative on Form RC98 to take over the repayments.
What is the deadline to actually buy the home? Before October 1 of the year after the year of your first withdrawal. A further year is available if you have another written agreement in hand before that date, and there is a separate route for homes under construction based on payments made to arm’s length contractors.