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, it's been running since 1992, and the 2024 budget gave it the largest single increase in its history. The withdrawal cap jumped from $35,000 to $60,000 for withdrawals made after April 16, 2024. The repayment-grace extension that followed effectively gives recent first-time buyers up to 5 years before they need to start paying back.

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 real difference for buyers who've been quietly maxing their RRSP for years. Before April 16, 2024 the most an HBP withdrawal could be was $35,000, useful, but on a $700,000 Surrey townhouse it covered about half of the down payment. Sixty thousand changes that math meaningfully.

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 90-day rule still applies: contributions you've made to your RRSP within the 90 days before the withdrawal may not be deductible in the year of contribution, which is the CRA's anti-stuffing rule. We'll come back to this in a moment because it's the most common HBP mistake.

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.
• The RRSP funds must have been in the account for at least 90 days before the withdrawal to be deductible. (See "the 90-day stuffing 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 90-day stuffing rule

This is the most common mistake we see. If you contribute to your RRSP within 90 days of the HBP withdrawal, that contribution may not be deductible.

Why the rule exists: without it, a first-time buyer with $60,000 of cash and lots of RRSP room could just dump $60,000 into their RRSP in May, claim the deduction, withdraw $60,000 in June under the HBP, and have effectively converted a regular savings account into a tax-deductible one. The CRA closes that loop by treating contributions inside the 90-day window as non-deductible to the extent they're withdrawn under the HBP.

The practical implication: make any final RRSP contributions you're planning at least 90 days before the HBP withdrawal. For a buyer planning to withdraw at completion in October, that means the latest deductible RRSP contribution would land in early July. If you're a few months from buying and your RRSP balance is light, talk to your accountant about whether topping up still makes sense or whether the FHSA is the better vehicle for those dollars instead.

How to withdraw

The mechanics are simple. You complete Form T1036 (Home Buyers' Plan Request to Withdraw Funds from an RRSP), give it to the financial institution that holds your RRSP, and they release the money tax-free. You can submit multiple T1036s, one withdrawal per RRSP, or several withdrawals from different RRSPs, as long as the total stays under $60,000 per buyer and all the withdrawals happen in the same calendar year (with one exception for January of the next year, as long as you didn't move into the home in the previous year).

Your RRSP issuer reports the withdrawal to the CRA on a T4RSP slip with the HBP indicator. You'll report it on Schedule 7 of your next tax return. No tax is withheld at source for a properly-designated HBP withdrawal.

You must buy or build the qualifying home before October 1 of the year following the withdrawal. If you don't, you have to include the withdrawal in income for the year you took it.

Repayment, the 15-year clock

After the grace period ends, you repay 1/15th of the original withdrawal each year into your RRSP. The CRA's repayment page handles the mechanics.

The repayment is a regular RRSP contribution that you designate as an HBP repayment on Schedule 7. Designated repayments don't get the usual RRSP deduction, you've already had the deduction once, on the way in years before. The contribution counts only against the HBP balance, not against new RRSP room.

If you over-contribute in a given year, the excess can be:

• Treated as a regular deductible RRSP contribution (if you have RRSP room), or
• Carried forward to reduce future required repayments (effectively front-loading).

If you under-contribute, the shortfall is included in your taxable income for that year at your marginal rate. The 15-year clock keeps running, a missed year can't be made up later.

For a typical $60,000 withdrawal, the annual minimum is $4,000. For a couple each withdrawing $60,000, it's $8,000 between them. That's the planning number to budget into your post-purchase cash flow.

The 5-year grace period

This is the change most first-time buyers haven't caught up with.

Standardly the HBP repayment clock starts in the second year following the year of withdrawal. So a withdrawal in 2026 would have its first required repayment in 2028.

For first withdrawals made between January 1, 2022 and December 31, 2025, the federal government extended the grace by an additional 3 years, giving a total of 5 years before repayments need to start. The 15-year repayment period itself begins in the fifth year following the first withdrawal year.

For most Fraser Valley first-time buyers who closed in 2024 or 2025, that means the first required repayment lands in 2029 or 2030. The early years of homeownership, when cash is tightest, when furniture and curtains and unexpected repairs eat into every dollar, are exactly the years buyers most need the grace.

If your first withdrawal was in 2026 (this year), the 5-year grace does not apply to you. Your repayments start in 2028. The grace was a one-time extension, not a permanent change.

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 90-day window. Already covered above. This is the single biggest one.

Missing the October-1-next-year buy deadline. If a deal falls through and you don't replace it with another qualifying purchase by October 1 of the following year, the withdrawal becomes taxable income. Talk to your accountant immediately if your deal collapses, there may be a path to repay the withdrawal back to the RRSP within the same window to avoid the income inclusion.

Withdrawing too much. If you withdraw more than you actually need for the down payment and closing costs, the excess can't go back into the RRSP without consuming new contribution room. Match the withdrawal to the closing requirement; don't withdraw the full $60,000 just because you can.

Forgetting to claim the deduction in the year of contribution. Different from the FHSA, for the HBP this is about original RRSP contributions you made years ago. Most HBP users have already claimed those deductions. But if you're topping up the RRSP to prepare for a HBP withdrawal and the 90 days have cleared, claim the deduction on this year's return; don't carry it forward unless an accountant suggests otherwise.

Confusing the HBP with a regular RRSP withdrawal. A regular RRSP withdrawal is taxed as income with withholding tax at source. An HBP withdrawal isn't, if properly designated on T1036 before the money comes out. The T1036 has to go in before the withdrawal, not after.

Talk to your accountant about the deduction timing

Whether to claim the HBP-prep RRSP contribution 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.