Home Buyers' Plan

The First Time Home Buyers’ Plan allows qualified first-time buyers to withdraw up to $35,000 tax-free from their RRSPs, to purchase or build a home. If a couple is buying together, and both are qualified first-time buyers, they can withdraw $35,000 each for a total of $70,000.

Eligibility

To be eligible for the First Time Home Buyers’ Plan (HBP), you must:

• Be a Canadian resident
• Be considered a first-time homebuyer
• Not have owned a home within the past four years
• Not have lived in a home that your spouse owned within the past four years, if you are now buying together
• Sign a written agreement to buy or build a home
• Intend on living in the home within one year of buying or building it
• Not own the home for more than 30 days before making the withdrawal
• Close the sale before October 1 of the year after you made the withdrawal

Buyers with special needs or who are purchasing homes that are more accessible for an individual with special needs, and/or who are eligible for the Disability Tax Credit, may also be eligible to use the HBP, even if the other eligibility requirements are not met.

Withdrawing from your RRSP

When you find a home you want to buy, you put in an Offer to Purchase (with any conditions you want—a home inspection and/or time to confirm your financing being the most common). Once the seller agrees, you finalize the Agreement of Purchase and Sale (APS) and book your home inspector. At the same time, you can fill out Form T1036, take it to the financial institution that holds your RRSPs, and withdraw the amount you need for your down payment, once you have a firm and binding APS.

To withdraw funds from your RRSPs, using the First Time Home Buyers’ Plan, you must print a copy of Form T1036. Fill out Section 1 yourself then bring the form to the financial institution that holds your RRSPs, so they can fill in Section 2 and make your withdrawal.

Once the withdrawal has been made, your financial institution will send you a T4RSP form, which confirms how much you withdrew. You’ll need to reference this form in the income tax return for the year you made your withdrawal.

Repaying your Home Buyers’ Plan

Because the Home Buyers’ Plan is considered a loan, it must be repaid. You have to repay at least 1/15 of the amount you borrowed each year. Repayment begins the second year after your withdrawal, and the full amount must be paid off within 15 years of that date. For example, if you withdrew funds in 2019, your first year of repayment will be 2021.

If a condition is not met, after you have made the withdrawal, you will have to claim the amount as income on your personal income taxes and you will pay tax on it. If you’ve already submitted an assessment for the year you made the withdrawal, you will be required to submit a reassessment.