The RRSP Home Buyers’ Plan (HBP): The $60,000 Limit, the 89-Day Rule, and the 15-Year Repayment You Can’t Ignore
First-time buyers can pull money out of their RRSP for a down payment — but getting it out is the easy part. Knowing how and when to pay it back is what trips people up.
What is the RRSP Home Buyers’ Plan, and how much can I withdraw?
The Home Buyers’ Plan (HBP) lets an eligible first-time home buyer withdraw money from their RRSP, tax-free, to buy or build a first qualifying home. According to the Canada Revenue Agency (CRA), for withdrawals made after April 16, 2024, you can take out up to $60,000 per person — up from $35,000. It isn’t free money: you must repay it to your RRSP in installments over a set period, or the unpaid amount is added to your income and taxed.
Source: CRA (Canada.ca, 2026)
I’m Arthur Zhao. Every RRSP season, a client asks me the same thing: “I have money in my RRSP — can I pull it out for a down payment?” The answer is yes, and the tool is the Home Buyers’ Plan. But what actually trips people up is never the withdrawal — it’s the repayment: how to pay it back, when the clock starts, and what happens if you miss a year. Here is the new $60,000 limit, the 89-day contribution rule, the 15-year repayment schedule, and the temporary grace extension most people overlook — plus how to stack the HBP with the FHSA to build a bigger down payment.
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First, understand this: the HBP is a loan, not a gift
Many people treat the HBP as “taking my own money out of my account.” That’s only half right. According to the CRA (Canada.ca, 2026), the HBP lets you withdraw money from your RRSP tax-free to buy or build a first qualifying home — but that money is effectively a loan you take from your own retirement account. Nothing is withheld or taxed when you take it out; but if you don’t repay it on schedule, the unpaid portion gets added to your taxable income for that year. It’s more accurate to think of the HBP as a zero-interest loan you must pay back to yourself than as free money.
Who qualifies: you must be a "first-time home buyer"
In other words, even if you owned before, you can become a first-time buyer again once you’ve cleared that window. You also need a written agreement to buy or build, and you must intend to occupy the home as your principal residence within one year of the withdrawal.
💡 According to the CRA (Canada.ca, 2026), for HBP withdrawals made after April 16, 2024, the lifetime limit per person is $60,000 — a jump of $25,000 from the previous $35,000.
A few things to know: this is a per-person limit, so a couple where both qualify can withdraw up to $120,000 combined; it’s a lifetime cap, not an annual reset; and your issuer only skips withholding tax when your withdrawals stay at or under $60,000. To withdraw, you generally file the CRA’s Form T1036 with your RRSP issuer.
⚠️Don’t deposit money one day and withdraw it the next to grab a deduction. Per the CRA, RRSP contributions made within the 89 days before a withdrawal may not be deductible — to get both the deduction and the HBP withdrawal, let the money sit at least 90 days first.
The 89-day rule: money you just deposited may not be deductible
The precise rule: contributions made in that 89-day window are only fully deductible if the fair market value of the RRSP after the withdrawal is at least equal to those contributions. In plain terms — you can’t deposit money one day and pull it out the next to grab a deduction. The CRA closed that door. If you want both the contribution deduction and the HBP withdrawal, let the money sit in the account for at least 90 days before you touch it.
The 15-year repayment: starting year two, at least 1/15 a year
When the clock starts: normally, your repayment period begins the second year after your first withdrawal. For example, a first withdrawal in 2020 means your first repayment year is 2022. Each year’s minimum is generally the outstanding balance divided by the years remaining — roughly 1/15 of the total in the first year. You make the repayment by contributing to your RRSP and “designating” it as an HBP repayment on your return. Every year the CRA sends you an HBP Statement of Account with your Notice of Assessment, showing the minimum you must repay that year.
ℹ️If your first withdrawal was between January 2022 and December 2025, your repayment start is pushed from year two to the fifth year (Department of Finance, Budget 2024). Don’t start on the old year-two schedule — but don’t forget the deferred year when it does arrive.
Don’t miss it: a temporary 5-year grace extension
For example, if you made your first withdrawal in 2022, you’d normally start repaying in 2024 — but under this temporary measure, your first repayment year can be pushed to 2027. That gives new owners breathing room in the early, cash-tight years of homeownership. If you qualify, follow the deferred schedule — don’t scare yourself into starting early.
🚨A missed repayment has a real cost: the shortfall below your annual minimum is added to income (line 12900) and taxed at your rate, and you permanently lose its tax-sheltered growth inside the RRSP. Even paying just the minimum beats letting it convert to taxable income.
The cost of a missed repayment: it becomes taxable income
That means two things. First, you pay tax on money that produced no actual cash income. Second, the amount added to your income is no longer counted as owed to your RRSP (you’ve effectively “settled” it by paying tax) — but you permanently lose its future tax-sheltered growth inside the RRSP. So repay what you can, even if it’s only the annual minimum; that always beats letting it convert to taxable income.
HBP + FHSA: the two tools can be stacked
Many clients assume it’s HBP or FHSA — not both. It isn’t. According to the CRA (Canada.ca, 2026), you can use an HBP withdrawal and a qualifying FHSA withdrawal for the same qualifying home, as long as you meet each program’s conditions at the time of each withdrawal.
On the numbers: the FHSA has an annual contribution limit of $8,000 and a lifetime limit of $40,000, and a qualifying FHSA withdrawal comes out tax-free with nothing to repay; the HBP tops out at $60,000 but must be repaid over 15 years. Stack them, and a single first-time buyer can move a substantial tax-free down payment from these two channels. One caution: a qualifying FHSA withdrawal can’t be reversed once made, and each account has its own conditions — have an accountant sequence the withdrawals before you act.
💡 The HBP is a genuinely useful tool, but it has a cost: the money you pull from your retirement account stops compounding tax-free until you pay it back. For a first-time buyer who’s stretched on the down payment, using it to get over the threshold and into the market sooner is often worth it. But if your RRSP is thin and you’re not sure you can steadily replenish it, weigh it carefully. My advice: figure out how much HBP + FHSA can raise together, then test that against the 15-year repayment schedule and your cash flow, and have an accountant confirm the rules for the actual year you withdraw. This article is educational and is not tax or investment advice.
Frequently Asked Questions
How much can I withdraw under the Home Buyers’ Plan now?
According to the CRA (Canada.ca, 2026), for withdrawals made after April 16, 2024, the lifetime limit is $60,000 per person (up from $35,000). It’s a per-person limit, so a qualifying couple can withdraw up to about $120,000 combined.
I’ve owned a home before — can I still qualify as a first-time buyer for the HBP?
Possibly. Per the CRA (Canada.ca, 2026), what matters isn’t “never owned” but that in the withdrawal year and the four preceding calendar years, neither you nor your spouse/common-law partner lived in a home you owned as a principal residence. Clear that window and you can qualify again.
How long do I have to repay the HBP, and when does repayment start?
Per the CRA (Canada.ca, 2026), you repay your RRSP over a maximum of 15 years, at least 1/15 per year. It normally starts the second year after your first withdrawal — but for first withdrawals between January 2022 and December 2025, Finance (Budget 2024) temporarily pushes the start to the fifth year.
What happens if I don’t repay enough in a given year?
According to the CRA (Canada.ca, 2026), the shortfall is added to your income for that year (line 12900) and taxed at your marginal rate. You end up paying tax on money that produced no cash, and you permanently lose its tax-sheltered growth in the RRSP.
Can I use the HBP and the FHSA together for the same home?
Yes. Per the CRA (Canada.ca, 2026), as long as you meet each program’s conditions, you can combine an HBP withdrawal (up to $60,000, repaid over 15 years) with a qualifying FHSA withdrawal ($8,000/year, $40,000 lifetime, tax-free with nothing to repay) for the same qualifying home — a meaningfully larger down payment.
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS
VP & Branch Manager, Bay Street Group Inc.
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