RRSP Home Buyers' Plan (HBP) 2026: How To Use $60K Tax-Free

The RRSP Home Buyers’ Plan is the single most-used first-home strategy in Canada — and as of 2024 the withdrawal limit jumped from $35,000 to $60,000 per person. Combined with the new FHSA, a couple can now access up to $200,000 tax-advantaged for their first home.

Here’s how it works, who qualifies, and how to stack it with the FHSA for maximum benefit.

What the HBP actually is

The Home Buyers’ Plan lets first-time buyers withdraw money from their RRSP tax-free, as long as the funds are repaid to the RRSP within 15 years.

It’s essentially an interest-free loan from your future self. The CRA loosens the normal rule that RRSP withdrawals are taxable, on the condition that you put the money back over time.

2026 limits and rules

Withdrawal limit: $60,000 per person ($120,000 per couple if both are first-time buyers)

Eligibility:

• Must be a first-time home buyer (no home ownership in the current calendar year or previous four)
• Must be a Canadian resident
• Home must be a principal residence in Canada
• Must occupy as principal residence within one year of purchase
• RRSP funds must have been deposited at least 90 days before withdrawal

Repayment:

• Begins the second calendar year after withdrawal
• Repay 1/15th of the withdrawn amount each year, for 15 years
• Example: $60,000 withdrawal → $4,000/year repayment for 15 years
• Missed repayments are added to taxable income for that year (no penalty, but lost tax-deferral)

How HBP and FHSA stack

The FHSA (First Home Savings Account), introduced in 2023, fundamentally changed first-home strategy in Canada. The two accounts work together:

	FHSA	HBP (RRSP)
Annual contribution	$8,000	Subject to RRSP room
Lifetime contribution	$40,000	Subject to RRSP room
Tax-deductible?	Yes	Yes (when contributed)
Withdrawal tax	$0	$0 if repaid
Repayment required?	No	Yes (15 years)
Withdrawal limit	Full FHSA balance	$60,000

Optimal strategy for a single first-time buyer: Max the FHSA first ($40,000 over 5 years), then use HBP for additional down payment up to $60,000. Total tax-advantaged: $100,000.

For a couple: $80,000 FHSA + $120,000 HBP = $200,000 tax-advantaged toward a first home.

Qualifying for the HBP

You qualify as a “first-time home buyer” for HBP purposes if neither you nor your spouse owned a home that you occupied as a principal residence in:

• The current calendar year (before your withdrawal), OR
• The previous four calendar years

This means HBP is available more than once in a lifetime — if you sold your home, rented for 4+ years, and now want to buy again, you can use HBP again.

The 90-day rule (don’t get caught here)

RRSP contributions must be in the account at least 90 days before HBP withdrawal to qualify.

If you contribute $60,000 to your RRSP today and try to withdraw it next month for HBP, the CRA will not allow the deduction on your tax return for the contributed amount.

Plan ahead by at least 3 months. Most realtors and mortgage brokers recommend 6+ months to be safe.

Repayment mechanics — the part most people misunderstand

Once you withdraw, the CRA tracks your HBP balance. Each year (starting the second calendar year after withdrawal), you must contribute back 1/15th of the original amount.

Critical: The repayment doesn’t generate a new tax deduction. You’re paying back money you already deducted when you originally contributed.

Example: $60,000 HBP withdrawal in 2026:

• Repayment starts in 2028
• Required minimum: $4,000/year for 15 years
• You contribute $10,000 to your RRSP in 2028 → designate $4,000 as HBP repayment, $6,000 as deductible
• The $4,000 repayment portion: no tax deduction, just satisfies HBP

If you skip a year’s repayment: the missed $4,000 is added to your taxable income for that year. At a 30% marginal rate, that costs $1,200 in extra tax.

When HBP is the wrong move

The HBP is not always optimal. Don’t use it if:

1. You haven’t maxed your FHSA. Always exhaust the no-repayment FHSA before touching HBP.
2. Your RRSP is small. Withdrawing $30,000 from a $35,000 RRSP cripples your retirement growth. Wait until your RRSP is large enough to absorb the withdrawal.
3. You’re in a low tax bracket. RRSP contributions only make sense if the deduction is meaningful. Under $50K income, focus on TFSA and FHSA first.
4. You don’t have the cash flow to repay. Missing repayments creates a tax drag for 15 years. Be honest about your future cash flow.

Step-by-step: how to actually use the HBP

1. Confirm eligibility. Use CRA’s online “My Account” to check your RRSP deduction limit and confirm you’ve never owned a home (or it’s been 4+ years).
2. Contribute to your RRSP at least 90 days before withdrawal. Bring the balance up to your intended HBP amount.
3. Find your home and have an accepted purchase agreement. You need a binding agreement to qualify for the HBP withdrawal.
4. Submit Form T1036 (“Home Buyers’ Plan Request to Withdraw Funds from an RRSP”) to your RRSP issuer (Wealthsimple, Questrade, your bank). Most processes are fully online.
5. Receive the funds — typically 3–10 business days.
6. Close on the home within one year of withdrawal.
7. Track repayment. Starting the second calendar year, designate 1/15th of withdrawal as HBP repayment when contributing to your RRSP. Use Form T1-OVP and your annual NOA from CRA to track.

Common mistakes

• Withdrawing more than you need. You can only withdraw once per HBP “event.” If you over-withdraw, you can’t return excess and the unused portion is taxable.
• Forgetting about the 90-day rule. Contributing in March and trying to withdraw in April will fail.
• Missing the first repayment year. Your second tax year after withdrawal is when repayment begins. Note it on your calendar.
• Designating the entire RRSP contribution as HBP repayment. You can split between repayment and new deductible contribution. Maximize the deductible portion when in a high-income year.

Read next

• How to invest in Canada — investing basics
• How to open a TFSA — pair with TFSA savings
• Best FHSA in Canada — open the FHSA first
• TFSA contribution limit 2026 — TFSA limits