Buying your first home – Home Buyers Plan?

Without a doubt, it makes a complete sense to start saving money early for your first home when you are just out of university. Even $50 to $100 monthly saving can work amazingly well over time towards your personal goal of 5% to 10% down-payment for your dream home. This saving can even work better if you can contribute it to your RRSP and withdraw it under “Home Buyers Plan” program.




This plan has more than few benefits for the first time home buyer. Along with saving, you should able to increase your tax refund and even your investment within the RRSP bucket if you invest wisely. This program allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home. Simply, use it when you are ready and able to accumulate enough for a down-payment. Personally, I have friends who have utilized this CRA program successfully without any issues to buy their first home in Canada. Simply, it allows you to withdraw from your RRSP account without paying any taxes or interest if you meet all the conditions of the HBP.


for sale


Things to consider before opting for the HBP program:

– You must be a Canadian resident at the time of withdrawal.
– You or your spouse can withdraw up to $25000 per head if you buy the home together.
– Money must stay in your RRSP for at least 90 days before it can be used for this program.
– First-time home-buyer means in the last four years, you didn’t live in a home that you or your partner owned previously.
– Once the four years have passed, you may be qualified for HBP again.
– You must agree to buy or build a qualifying home for yourself or for a related person with a disability.
– It must be your principal place of residence within one year of buying or building it.
– Usually, you are not allowed to withdraw money from locked-in RRSP or a group RRSP.
– Usually, a preapproved mortgage doesn’t qualify for this program.





Generally, you have up to 15 years to repay the amount you withdrew from your RRSP under the HBP program. However, if you want, you can repay the full amount into your RRSP at any time.

Every year, you will receive an HBP statement of account with your notice of assessment from CRA. This statement will outline the amount you have already paid, your HBP account balance, and the amount you have to contribute to your RRSP as a repayment for the following year.
You can also check your HBP balance online through CRA’s My Account service.





Leave a Comment