First-Time Home Buyer RRSP Plan (HBP) 2026: Complete Guide

The Home Buyers' Plan (HBP) is one of Canada's most powerful tools for first-time home buyers, allowing you to access your retirement savings tax-free to purchase your first home. With the 2024 Federal Budget changes now in effect, the HBP has become even more valuable—the withdrawal limit increased to $60,000 (up from $35,000), and the repayment period extended to 17 years (up from 15 years).

For young professionals in the Greater Toronto Area facing housing prices that average $800,000 to $1.2 million, the HBP can provide crucial down payment support. Combined with the new First Home Savings Account (FHSA), first-time buyers can now access up to $100,000 in tax-advantaged funds individually, or $200,000 as a couple.

This comprehensive guide explains everything you need to know about the Home Buyers' Plan in 2026, including eligibility requirements, application procedures, repayment rules, and strategies to maximize the HBP for your home purchase.

What is the Home Buyers' Plan (HBP)?

The Home Buyers' Plan is a federal government program that allows first-time home buyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home, without paying tax on the withdrawal. The withdrawn amount must be repaid to your RRSP over 17 years.

Key Changes from the 2024 Federal Budget

The 2024 Budget introduced significant improvements to the HBP:

• Increased withdrawal limit: Up from $35,000 to $60,000 (71% increase)
• Extended repayment period: Up from 15 years to 17 years
• More flexible repayment: Lower minimum annual repayment (1/17th vs. 1/15th)

For a couple, these changes mean accessing $120,000 combined instead of $70,000, with lower annual repayment requirements. For someone withdrawing the full $60,000, the minimum annual repayment is approximately $3,529 instead of the previous $2,333 for a $35,000 withdrawal—but you're accessing 71% more funds.

Who Qualifies for the Home Buyers' Plan?

To participate in the HBP, you must meet specific eligibility requirements. Understanding these criteria is essential before planning your home purchase.

First-Time Home Buyer Definition

You're considered a first-time home buyer if you (and your spouse or common-law partner, if applicable) haven't owned a home that you occupied as your principal residence at any time during the four-year period beginning January 1st of the fourth year before the year of withdrawal.

Additional Eligibility Requirements

• Resident of Canada: You must be a resident of Canada when you withdraw funds
• Written agreement: You must have a written agreement to buy or build a qualifying home
• Principal residence: You must intend to occupy the home as your principal residence within one year
• RRSP residency: Contributions must be in your RRSP for at least 90 days before withdrawal
• First-time buyer status: You meet the four-year non-ownership requirement

Special Exceptions to the First-Time Buyer Rule

Even if you previously owned a home, you may still qualify for the HBP in these situations:

HBP Withdrawal Limits and Rules

How Much Can You Withdraw?

The maximum HBP withdrawal in 2026 is $60,000 per person. If you're buying with a spouse or common-law partner who also qualifies as a first-time buyer, you can each withdraw up to $60,000, for a combined total of $120,000.

The 90-Day Seasoning Rule

RRSP contributions must remain in your account for at least 90 days before you can withdraw them under the HBP. This "seasoning period" prevents people from contributing to their RRSP specifically to use the HBP and claiming both the RRSP tax deduction and the tax-free HBP withdrawal immediately.

Withdrawal Timing Requirements

Your HBP withdrawal must occur in the same year as your home purchase or in the year before you buy or build a qualifying home. You must occupy (or intend to occupy) the home as your principal residence within one year after buying or building it.

How to Apply for the Home Buyers' Plan

Applying for the HBP is a straightforward process, but it requires careful attention to timing and documentation.

Step-by-Step HBP Application Process

1. Ensure you meet eligibility requirements

   Confirm you qualify as a first-time buyer, have a written agreement to buy or build a home, and plan to occupy it as your principal residence within one year.

2. Verify your RRSP balance and contribution dates

   Check that you have sufficient RRSP funds and that contributions have been in your account for at least 90 days.

3. Complete Form T1036

   Fill out the "Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP" form. This form is available from the Canada Revenue Agency or your RRSP issuer.

4. Submit the form to your RRSP issuer

   Provide the completed T1036 form to your financial institution. They will process the withdrawal and report it to the CRA.

5. Receive your funds

   Your RRSP issuer will provide the withdrawn amount. No tax is withheld because it's a tax-free withdrawal under the HBP.

6. Complete your home purchase

   Use the funds for your home purchase closing. Keep all documentation for your records.

7. File your tax return

   Report your HBP withdrawal on your tax return using Schedule 7. The CRA will track your repayment obligations.

Required Documentation

• Completed Form T1036 (HBP Request to Withdraw Funds from an RRSP)
• Written agreement to buy or build a qualifying home (purchase agreement, sales contract, or building contract)
• RRSP statements showing contribution dates and balances
• Proof of first-time buyer status (self-certification on Form T1036)
• If applicable: documentation of relationship breakdown or disability

HBP Repayment Rules

Understanding the repayment rules is crucial because missed repayments have tax consequences. The good news is that the 2024 Budget changes made repayment more manageable.

Repayment Period and Schedule

You have 17 years to repay your HBP withdrawal. The repayment period begins the second year after the year you made your withdrawal.

Minimum Annual Repayment

Each year, you must repay at least 1/17th of the total amount you withdrew. This works out to approximately 5.88% of your withdrawal amount annually.

What Happens If You Don't Repay?

If you don't make the minimum annual repayment, the amount you should have repaid is added to your taxable income for that year. This means you'll pay income tax on that amount at your marginal tax rate.

Making HBP Repayments

HBP repayments are made by contributing to your RRSP and designating the contribution as an HBP repayment on Schedule 7 of your tax return. Here's what you need to know:

• Repayments don't use contribution room: HBP repayments don't count against your RRSP contribution limit. They're separate from regular RRSP contributions.
• No tax deduction for repayments: You don't get an RRSP deduction for HBP repayments because you already got the benefit of the tax-free withdrawal.
• You can repay more than the minimum: There's no penalty for repaying your HBP balance faster than required. Accelerated repayment reduces your future obligations.
• Repayments are due by the contribution deadline: You have until 60 days after year-end (same as the RRSP contribution deadline) to make that year's HBP repayment.

Combining HBP with the First Home Savings Account (FHSA)

One of the most powerful strategies for first-time home buyers in 2026 is combining the HBP with the First Home Savings Account (FHSA), introduced in 2023.

How the FHSA Works

The FHSA is a registered account that combines the best features of RRSPs and TFSAs:

• Contribution limit: $8,000 per year, $40,000 lifetime maximum
• Tax deduction: Contributions are tax-deductible (like RRSP contributions)
• Tax-free withdrawals: Withdrawals for first home purchase are completely tax-free (like TFSA withdrawals)
• No repayment required: Unlike the HBP, you don't need to repay FHSA withdrawals

Maximum Combined First-Time Buyer Funds

Strategic Considerations: HBP vs. FHSA

While both accounts are valuable, there are strategic reasons to prefer one over the other:

Spousal RRSP and HBP Considerations

Spousal RRSPs add an extra layer of complexity to HBP planning, but they can be advantageous in the right circumstances.

How Spousal RRSPs Work with HBP

A spousal RRSP is an RRSP that one spouse contributes to, but the other spouse owns. The contributor gets the tax deduction, while the account holder can make withdrawals. For regular RRSP withdrawals, there's a three-year attribution rule—withdrawals within three years of contribution are taxed back to the contributor.

The good news: The three-year attribution rule doesn't apply to HBP withdrawals.

Important Spousal RRSP HBP Rules

• Each spouse must apply for their own HBP withdrawal (you can't withdraw from your spouse's RRSP)
• Each spouse must meet the first-time buyer requirements independently (with the exception of your spouse's home ownership—your spouse's previous home ownership doesn't disqualify you if you're buying together)
• Each spouse is responsible for repaying their own HBP withdrawal
• The 90-day seasoning rule applies to spousal RRSP contributions
• Normal spousal RRSP contribution rules apply (contributions count against the contributor's RRSP room, not the account owner's)

HBP During Divorce or Separation

Life circumstances change, and the HBP rules include special provisions for individuals going through divorce or separation.

Using HBP Again After Relationship Breakdown

If you've used the HBP before, you generally can't use it again unless you've met the four-year non-ownership requirement. However, there's an important exception for relationship breakdown.

You may be able to participate in the HBP again if:

• You're living separate and apart from your spouse or common-law partner due to a breakdown of your relationship
• You've fully repaid your previous HBP balance
• You meet all other HBP eligibility requirements

HBP Obligations During Separation

Going through a separation doesn't relieve you of your HBP repayment obligations. You must continue making your annual repayments according to the schedule, regardless of changes in your living situation or home ownership status.

Important points:

• You remain responsible for your own HBP repayments even if you move out of the home purchased with HBP funds
• If you transfer RRSP funds to your ex-spouse as part of equalization, those funds can't be used to satisfy your HBP obligation—HBP repayments must come from your own contributions
• Your ex-spouse remains responsible for their own HBP repayments even if they no longer live in the home
• Family court can't order one spouse to make the other spouse's HBP repayments—each person's HBP obligation remains with them individually

Common HBP Mistakes to Avoid

Even with the straightforward rules, many first-time buyers make costly mistakes when using the HBP. Here are the most common pitfalls and how to avoid them.

1. Contributing Too Close to Home Purchase

The 90-day seasoning rule catches many buyers off guard. If you contribute to your RRSP within 90 days of your HBP withdrawal, that contribution can't be included in your HBP amount—it must stay in your RRSP.

Solution: Plan ahead. Make your RRSP contributions at least 90 days before you expect to need the funds for your home purchase. If your home purchase timeline accelerates unexpectedly, you may not be able to access recent contributions under the HBP.

2. Forgetting About HBP Repayments

Many first-time buyers focus on getting into their home and forget about the repayment obligation that starts two years later. When repayments begin, they're caught off guard by the additional financial commitment.

Solution: Set up automatic monthly contributions to your RRSP specifically for HBP repayments. For a $60,000 withdrawal, this is about $294/month. Treat it like any other monthly bill.

3. Not Designating Repayments Correctly

RRSP contributions won't automatically count as HBP repayments—you must designate them as such on Schedule 7 of your tax return. Some people make contributions but forget to designate them, resulting in unnecessary income inclusion.

Solution: Work with your tax preparer or carefully complete Schedule 7 each year. Your RRSP contribution receipt will show how much you contributed, but only you can designate how much counts toward HBP repayment.

4. Using HBP When You Don't Qualify

Some buyers assume they qualify as first-time buyers without carefully reviewing the four-year non-ownership rule. If you owned a home more recently than you thought, using the HBP incorrectly can result in the entire withdrawal being added to your taxable income.

Solution: Carefully review your home ownership history. Remember, the four-year period starts January 1st of the fourth year before withdrawal, not exactly four years to the day. When in doubt, consult with a tax professional before completing your HBP withdrawal.

5. Withdrawing More Than You Can Afford to Repay

Just because you can withdraw $60,000 doesn't mean you should. If you withdraw the maximum but can't afford the $3,529 annual repayments, you'll face tax consequences and reduce your retirement savings.

Solution: Consider your long-term financial picture. Calculate your monthly budget including mortgage payments, property taxes, insurance, maintenance, and HBP repayments. Withdraw only what you need and what you can realistically repay over 17 years.

Impact on Retirement Planning

While the HBP is a valuable tool for home ownership, it's important to understand its long-term impact on your retirement savings.

The Opportunity Cost of HBP

When you withdraw $60,000 from your RRSP at age 30, you're not just removing $60,000—you're removing decades of potential investment growth. If that $60,000 would have grown at 6% annually until age 65, it would have been worth approximately $344,000.

However, this calculation assumes you wouldn't repay the HBP. If you diligently make your repayments, the opportunity cost is much lower—essentially the growth on the funds during the years they're outside your RRSP.

Balancing Home Ownership and Retirement Savings

For most Canadians, owning a home is itself a form of retirement planning. Your home equity grows as you pay down your mortgage and as property values appreciate. In the GTA, where home prices have historically increased faster than inflation, home ownership can be a valuable wealth-building strategy.

Strategies to Minimize Retirement Impact

1. Make accelerated HBP repayments

   Pay more than the minimum each year to reduce the time your funds are outside your RRSP. Even an extra $100/month can significantly reduce the opportunity cost.

2. Continue making regular RRSP contributions

   HBP repayments don't count toward your contribution room, so you can (and should) continue making regular RRSP contributions for tax deductions and retirement savings.

3. Use TFSA for additional savings

   Complement your RRSP repayments with TFSA contributions for tax-free growth and flexible access.

4. Increase contributions when income rises

   As your income grows throughout your career, increase both your HBP repayments and regular retirement contributions.

Provincial Considerations: Ontario and GTA Specifics

While the HBP is a federal program with consistent rules across Canada, there are Ontario-specific considerations for GTA home buyers.

GTA Housing Market Context

The Greater Toronto Area has some of Canada's highest home prices. As of 2026, average home prices by region:

• Toronto: $1,200,000 - $1,500,000
• Mississauga: $900,000 - $1,100,000
• Brampton: $850,000 - $1,000,000
• Markham: $1,100,000 - $1,300,000
• Vaughan: $1,000,000 - $1,200,000

For homes in this price range, the standard down payment requirement is:

• 5% on the first $500,000
• 10% on the portion from $500,000 to $999,999
• 20% on amounts of $1,000,000 or more

Ontario Land Transfer Tax

Ontario charges land transfer tax on all home purchases, and Toronto has an additional municipal land transfer tax. First-time buyers receive rebates:

• Ontario rebate: Up to $4,000
• Toronto rebate: Up to $4,475 (for Toronto purchases)

While these rebates help, land transfer tax can still be substantial on higher-priced homes. Having extra funds from the HBP can help cover these costs.

FHSA vs. HBP for Ontario Buyers

Given Ontario's high home prices, many buyers benefit from maximizing both the FHSA and HBP. The no-repayment feature of the FHSA is particularly attractive when combined with the higher HBP withdrawal limit.

Tax Filing and CRA Reporting

Properly reporting your HBP withdrawal and repayments is essential to avoid tax complications.

Initial HBP Withdrawal Reporting

When you make an HBP withdrawal, you must report it on your tax return:

1. Your RRSP issuer will send you a T4RSP slip showing the withdrawal
2. Report the withdrawal on line 12900 of your tax return
3. Complete Schedule 7 (RRSP, PRPP and SPP Unused Contributions, Transfers, and HBP or LLP Activities)
4. The HBP withdrawal appears on line 12900 but is offset on line 12920, resulting in no tax

Annual HBP Repayment Reporting

Each year, you must report your HBP repayment (or lack thereof):

1. Make your RRSP contribution (standard contribution or specifically for HBP repayment)
2. Complete Schedule 7 of your tax return
3. Indicate how much of your RRSP contribution you want to designate as HBP repayment
4. HBP repayments don't generate RRSP deductions—they appear separately

CRA Monitoring and Reassessment

The CRA tracks your HBP balance and required annual repayments. Each year, they send you a Notice of Assessment showing:

• Your remaining HBP balance
• Your minimum required repayment for the next year
• Any amounts added to your income due to missed repayments

Keep these notices for your records and provide them to your tax preparer to ensure accurate reporting.

Alternatives to the HBP

While the HBP is valuable, it's not the only option for funding your first home purchase. Consider these alternatives or complementary strategies.

1. First Home Savings Account (FHSA)

As discussed earlier, the FHSA offers tax-deductible contributions and tax-free withdrawals with no repayment requirement. It's superior to the HBP if you have time to contribute over several years.

2. Gifts from Family (Family Assistance)

Many first-time buyers receive gifted down payments from parents or family members. These gifts are not taxable to the recipient and don't need to be repaid. Lenders typically require a gift letter confirming the funds are a gift, not a loan.

3. Non-Registered Savings

Saving for your down payment in a regular savings account or non-registered investment account avoids the HBP repayment obligation. While you lose the initial tax deduction benefit, you don't need to repay the funds. See our guide on RRSP vs TFSA vs non-registered accounts for allocation strategies.

4. TFSA Withdrawals

TFSA withdrawals are tax-free with no repayment requirement and no restrictions on use. If you've been contributing to your TFSA, these funds can supplement or replace HBP withdrawals. The advantage: no repayment obligation. The disadvantage: most people have less in their TFSA than their RRSP.

5. Employer Stock Plans or Bonuses

If you work for a company with an employee stock purchase plan or you're expecting a bonus or severance payment, these funds can contribute to your down payment without touching retirement savings.

Frequently Asked Questions

Key Takeaways

• The Home Buyers' Plan allows first-time buyers to withdraw up to $60,000 from their RRSP tax-free ($120,000 for couples)
• You have 17 years to repay the withdrawal, starting in the second year after withdrawal, with minimum annual repayments of 1/17th
• Eligibility requires being a first-time buyer (no home ownership in the past four years) with exceptions for disability and relationship breakdown
• RRSP contributions must be in your account for 90 days before HBP withdrawal (the seasoning rule)
• Combining HBP with the First Home Savings Account (FHSA) allows access to up to $100,000 individually or $200,000 as a couple
• Missed repayments are added to taxable income, but diligent repayment minimizes long-term retirement impact
• HBP withdrawals from spousal RRSPs don't trigger attribution rules, creating strategic planning opportunities
• In the high-cost GTA housing market, the HBP provides crucial down payment support for homes averaging $800,000 to $1.2 million