The RRSP Home Buyers' Plan for BC First-Time Buyers: $60,000, 15 Years, and the New 5-Year Grace

The FRIVE team recommends most buyers understand the RRSP Home Buyers' Plan before they even look at their first property. The Home Buyers' Plan is the older of the two federal programs aimed at first-time buyers. The 2024 federal budget raised the withdrawal cap from $35,000 to $60,000 for withdrawals made after April 16, 2024. The Canada Revenue Agency also delays the start of repayment to the fifth year after the year of withdrawal for first withdrawals made from 2022 to 2028, so a 2026 withdrawal has its first repayment year in 2031.

For a Fraser Valley first-time buyer with meaningful RRSP balances built up over a decade of working, the HBP can move real money into the down payment without triggering tax. Used alongside the FHSA, the combined tax-advantaged headroom for a qualifying couple is up to $200,000.

This page is the FRIVE team's plain-English walk-through of the program, who qualifies, how to withdraw, how to repay, and where Fraser Valley buyers most often get caught.

What the HBP actually does

The HBP is structurally a loan from yourself to yourself. You withdraw money from your RRSP without paying the usual withholding tax. The money is treated as a tax-free withdrawal at the time. Then over the next 15 years you repay the withdrawal back into your RRSP through designated annual contributions. As long as you make the required repayments, the original withdrawal stays tax-free. Miss a repayment and that year's portion becomes taxable income.

The point is to bridge the gap between "I have $40,000 in my RRSP" and "I have $40,000 of down payment to put down" without the buyer paying tax twice, once when the contribution comes out as income, and again on the way out as a withdrawal.

The cap raised to $60,000 in 2024 makes a difference for buyers who have been contributing to their RRSP for years. Before April 16, 2024 the most an HBP withdrawal could be was $35,000. On a $700,000 townhouse, a 10% down payment is $70,000, so a $60,000 withdrawal covers most of it, where $35,000 covered half.

The new limit and when it applies

The increase is straightforward: withdrawals made after April 16, 2024 can be up to $60,000. Withdrawals made on or before that date cap at $35,000. The CRA's HBP page is the source.

If you're a couple where both spouses qualify, each can withdraw up to $60,000 from their own RRSP for the same qualifying home. The combined cap is $120,000. The 89-day rule still applies: the deduction for RRSP contributions made in the 89 days before the withdrawal can be limited. We come back to this below, because it is easy to trip over.

Who qualifies

The HBP's first-time-buyer test mirrors the FHSA's, with a few extra conditions specific to the HBP:

• First-time home buyer: at no time in the current calendar year or the four preceding years did you live in a qualifying home that you (or your spouse or common-law partner) owned. Same definition the FHSA uses.
• Canadian resident from the time of withdrawal until the qualifying home is bought or built.
• Written agreement to buy or build the qualifying home.
• Intent to occupy the qualifying home as your principal residence within one year of buying or building.
• RRSP contributions made in the 89 days before the withdrawal can lose part of their deduction. (See "The 89-day contribution rule" below.)

The "first-time buyer" definition is identical to the FHSA's, which is why almost every first-time buyer who qualifies for one qualifies for the other. There's a niche scenario where someone qualifies for the HBP but not the FHSA, a buyer whose spouse owned a principal residence in the lookback window, but it's rare enough that we'll skip it.

The 89-day contribution rule

If you contribute to your RRSP in the 89 days before an HBP withdrawal, the Canada Revenue Agency may limit your deduction for that contribution. The CRA's withdrawal page gives the test: you cannot deduct the amount by which your contributions in that period are more than the value of the RRSP just after the withdrawal.

Two examples worked out with that test (our own figures, so confirm yours with an accountant):

• The RRSP holds $20,000. You add $50,000 and withdraw $60,000. The RRSP is left with $10,000, so $50,000 minus $10,000 = $40,000 of the new contribution is not deductible.
• The RRSP holds $80,000. You add $50,000 and withdraw $60,000. The RRSP is left with $70,000, which is more than the $50,000 you added, so the whole contribution stays deductible.

The practical step: before you make a large contribution ahead of a withdrawal, add up what the RRSP will hold after the withdrawal and compare it with what you put in during the previous 89 days. If the two numbers are close, talk to your accountant first, and ask whether the FHSA is the better place for those dollars.

How to withdraw

You fill out Form T1036 (Home Buyers' Plan Request to Withdraw Funds from an RRSP), complete Area 1, and give it to the financial institution that holds your RRSP. The institution fills out Area 2. You need a separate form for each withdrawal. You can withdraw from more than one RRSP, but only in the same calendar year as your first withdrawal and in January of the following year. The total cannot be more than $60,000, and the issuer withholds no tax on withdrawals of $60,000 or less. These points come from the CRA pages on how to withdraw and how to participate.

You need a written agreement to buy or build a qualifying home at the time of the withdrawal. A pre-approved mortgage does not count as that agreement.

The CRA says the home must be bought or built before October 1 of the year after the year of your first withdrawal. A second written agreement signed before that date can give you one more year. If you do not buy or build, you can cancel the participation by paying the money back to your RRSP (see the mistakes section below).

Repayment, the 15-year clock

Once the repayment period starts, you repay 1/15th of the balance each year into your RRSP. The CRA's repayment page handles the mechanics.

You contribute to your RRSP in the repayment year, or in the first 60 days of the next year, then designate the contribution as an HBP repayment on Schedule 7 (line 24600). You cannot claim a deduction for the amount you designate, and repayments do not reduce your RRSP deduction limit.

If you repay more than the minimum in a year, the minimum for later years goes down. You still repay each year until the balance is zero.

If you repay less than the minimum, the shortfall is added to your income as RRSP income on line 12900 for that year.

For a $60,000 withdrawal, the annual minimum is $4,000. For a couple who each withdraw $60,000, it is $8,000 between them. That is the planning number to budget into your cash flow after the purchase.

The 5-year repayment delay

Before 2022, the repayment period started in the second year after the year of the first withdrawal. Budget 2024 added three years for first withdrawals made from January 1, 2022 to December 31, 2025, so repayment starts in the fifth year. The CRA's main HBP page, dated 2026-02-17, says this relief now also covers first withdrawals from January 1, 2026 to December 31, 2028. Its own example: a first withdrawal in 2026 means the first repayment year is 2031.

The table applies the CRA rule (fifth year after the withdrawal year, then 15 years). The CRA page describes no relief for a first withdrawal after 2028, so check the page again before you plan a withdrawal in 2029 or later.

The first years of owning a home are when cash is tightest, with furniture, repairs and moving costs. A first repayment year of 2031 gives a 2026 buyer time to build savings before the $4,000 a year starts.

How the HBP stacks with the rest of the hub

The HBP and the FHSA are designed to be used together. The CRA explicitly allows it. For a Fraser Valley couple where both partners qualify, the combined tax-advantaged headroom is $40,000 + $40,000 + $60,000 + $60,000 = $200,000. Almost no first-time buyer uses the full envelope, but the envelope's existence changes what's possible.

The HBP is independent of the PTT exemptions, they test different things. It's also independent of the federal GST rebate. All four can apply to the same purchase.

Common mistakes we see

Contributing to the RRSP inside the 89-day window. Covered above. Check the numbers before you contribute.

Missing the buy-or-build deadline. The home (or a replacement) must be bought or built before October 1 of the year after your first withdrawal. If your purchase falls through, the CRA's cancellation page says the cancellation payments are generally due by December 31 of the year after the year of your first withdrawal. Any part you do not pay back by then is added to your income for the year you withdrew it. Talk to your accountant right away if your deal collapses.

Not planning the repayments. The first repayment year can be five years away, which makes it easy to forget. Put the date in your calendar, and check the annual HBP statement of account the CRA sends with your notice of assessment.

Confusing the HBP with a regular RRSP withdrawal. A regular RRSP withdrawal is taxed as income, with tax withheld at source. An HBP withdrawal made with Form T1036 is not taxed if you meet the conditions. Give the T1036 to your RRSP issuer before the money comes out.

Talk to your accountant about the deduction timing

Whether to claim an RRSP contribution made before an HBP withdrawal this year or carry it forward, and the right sequencing between RRSP and FHSA contributions, is an accountant's call. We can tell you the program exists and explain the mechanics; the optimal sequence depends on your full tax picture.

More in this hub

• Pillar, BC Buyer Programs and Taxes (2026)
• First Home Savings Account (FHSA), the sibling program.
• PTT first-time-buyer exemption
• Newly Built Home PTT exemption
• GST rebate on a new home
• How much house can you actually afford in the Fraser Valley?

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Browse Fraser Valley listings on FRIVE or book a 20-minute chat with us. We'll never push you to write before you're ready, and we'll help you sequence the FHSA, the HBP, and the PTT picture so the closing day adds up to something you've planned for, not a surprise.