The RRSP Home Buyers' Plan (HBP) in 2026: The $60,000 Rules

What the HBP actually is

The HBP is a CRA-administered program that lets you withdraw funds from your RRSP without triggering the normal income tax that RRSP withdrawals create, on the condition that the money is used to buy or build a qualifying first home and that you repay the withdrawal back into your RRSP over 15 years (CRA). Think of it as a tax-deferred loan from yourself — useful if you've been steadily contributing to an RRSP and need a big lump sum for closing.

The $60,000 limit (and when it changed)

The HBP withdrawal limit was $25,000 from 2009 to 2019, $35,000 from 2019 to April 2024, and has been $60,000 per person since April 16, 2024. As of May 2026, the limit is still $60,000 and there are no announced changes. For a married or common-law couple who are both first-time buyers under CRA's definition, that's a $120,000 combined withdrawal — often enough to put 20% down on a Surrey or Langley townhouse and skip CMHC insurance entirely.

The 90-day rule (the most common HBP mistake)

Contributions to your RRSP must sit in the account for at least 90 days before you can withdraw them under the HBP without losing the tax deduction. This is the rule we see first-time buyers trip over most often. The scenario: someone gets a big bonus in February, contributes $50,000 to their RRSP, then tries to withdraw it for an HBP withdrawal in March for a quick April closing. Legally, the withdrawal works — but the $50,000 contribution no longer counts as a tax-deductible RRSP contribution.

The fix: if you're planning an HBP-funded purchase, do your large RRSP contribution at least 90 days before the planned closing. If timing is tight, talk to your mortgage broker about gift-letter or other down-payment sources for the gap.

The 15-year repayment schedule

Repayment starts in the second calendar year after the year of your withdrawal. If you withdraw on March 1, 2026, your first required repayment is for the 2028 tax year (filed in spring 2029). The annual minimum is 1/15 of the original withdrawal amount. For a $60,000 HBP, that's $4,000/year for 15 years.

How repayment works in practice: you make a regular contribution to your RRSP during the year, then on your tax return you designate part of that contribution as an HBP repayment (it doesn't get the tax deduction a normal RRSP contribution would, because you already got the deduction when the money was first contributed). The unused deduction stays as available room.

If you miss the minimum repayment in a given year, the shortfall gets added to your taxable income. So a missed $4,000 repayment becomes $4,000 of taxable income at your marginal rate — at a 33% rate, that's $1,320 of tax. Not catastrophic, but worth avoiding. Set up an automatic monthly RRSP contribution and you'll never miss.

HBP vs FHSA — which one first?

If you have to choose, the FHSA wins for most first-time buyers. Here's the head-to-head:

• Tax treatment: Both let you deduct contributions. The FHSA also lets you withdraw tax-free without repayment; the HBP requires 15-year repayment.
• Annual room: FHSA is $8,000/year, max $40,000 lifetime. HBP is one-shot up to $60,000.
• Flexibility: FHSA can also be moved to your RRSP if you don't end up buying. HBP requires actual home purchase or you repay/reabsorb the withdrawal.

The realistic answer for most first-time buyers we work with: use both. Max the FHSA first (better tax treatment), then top up with HBP. Together they give you up to $100,000 per person of tax-advantaged down-payment money — enough to put substantial down on a Fraser Valley first home without scrambling.

HBP withdrawal process — step by step

1. Confirm you're a first-time buyer under CRA's definition (haven't owned a home in current year + previous 4 calendar years).
2. Have a written agreement to buy or build a qualifying home in Canada.
3. Complete Form T1036 (Home Buyers' Plan Request to Withdraw Funds from an RRSP) and submit it to the financial institution that holds your RRSP.
4. The institution issues a T4RSP slip showing the HBP withdrawal in Box 27. They don't withhold tax — that's the point.
5. The funds get transferred to your account (or directly to your lawyer in trust for closing).
6. You report the HBP withdrawal on Schedule 7 of your tax return for the year of withdrawal.
7. Starting year 2 after withdrawal, designate 1/15 of the withdrawal as your annual HBP repayment on Schedule 7.

Most banks can process the withdrawal in 5–10 business days once the T1036 is signed. Don't wait until the week before closing.

When the HBP is the wrong move

Three situations where pulling from your RRSP isn't the right call:

• You have less than 5–10 years of working life left. The 15-year repayment runs into retirement. The unrepaid balance becomes taxable income at exactly the moment you want to minimize income.
• Your RRSP holdings would force a sale at a loss. If the market is down and your equity positions are underwater, pulling now locks in losses. Better to use GIC or cash-equivalent contributions to your RRSP timed to the 90-day window, then withdraw those.
• You can't realistically afford the repayments. $4,000/year on top of a new mortgage is a real commitment. If the answer is "I'll figure it out later," that's the wrong answer.