Using the RRSP Home Buyers' Plan to Buy Your First Home

Your RRSP is not just for retirement. If you are buying your first home in Edmonton, the Home Buyers' Plan lets you pull up to $60,000 out of your RRSP tax-free to fund your down payment, and a couple buying together can access up to $120,000 combined. This guide explains how it works, who qualifies, the repayment rules most people miss, and how the HBP stacks with the FHSA to get you into a home faster.

What the RRSP Home Buyers' Plan actually is

The Home Buyers' Plan (HBP) is a federal program that lets first-time buyers in Canada take money out of their RRSP without paying tax on the withdrawal. Normally, pulling money from an RRSP triggers tax in the year you withdraw it. The HBP is the exception, treating the withdrawal as a loan from yourself that you pay back over time.

The limit is $60,000 per person. Budget 2024 raised it from the old $35,000 cap, and the higher amount applies to withdrawals made after April 16, 2024. That change put up to $25,000 more in reach for every first-time buyer.

The money has to come from your own RRSP. One detail catches people off guard: contributions made in the 89 days before your withdrawal may not be deductible, so funds you plan to use generally need to sit in the account for at least 90 days first. The HBP is one of the few ways to move retirement savings into a down payment without losing a chunk to tax.

Who qualifies as a first-time buyer

The HBP uses a specific definition of "first-time buyer," and it is wider than most people expect. You qualify if you did not live in a home that you or your current spouse or common-law partner owned, as your principal residence, at any time in the four calendar years before your withdrawal or in the current year up to the 30 days before you withdraw.

That four-year window matters. If you sold a home five years ago and have rented since, you can be a first-time buyer again for HBP purposes.

You also have to buy or build a qualifying home before October 1 of the year after your first withdrawal. If you miss that deadline, you can cancel your HBP participation and repay the money to your RRSP. If you do not, the CRA includes the withdrawal in your income for the year you took it out, so you pay tax on it.

The Edmonton math: how far $60,000 goes

This is where the higher limit changes the picture. Let's anchor it to what homes actually cost in Edmonton right now.

At Edmonton's median residential list price of $544,150, the minimum down payment is $29,415. In Canada, the minimum is 5% on the first $500,000 and 10% on the portion above that, so this price needs $25,000 plus $4,415. A single $60,000 HBP withdrawal covers that minimum with roughly $30,585 left over, which you can put toward closing costs or a larger down payment to shrink your mortgage and your CMHC insurance premium.

Condos make the gap even clearer. At the median Edmonton condo list price of $246,977, the price sits under $500,000, so the flat 5% minimum applies and works out to just $12,349. A $60,000 HBP withdrawal covers the full down payment and leaves a meaningful cushion for the costs that come with closing.

Before you assume a price works for your budget, run the numbers. Use our affordability calculator to see your maximum purchase price based on your income, debts, and down payment, including the stress test lenders apply. Then plug a target price into the mortgage calculator to see the monthly payment at today's rates.

The repayment rules people forget

The HBP is a loan to yourself, and you have to pay it back into your RRSP over 15 years. Each year you repay 1/15th of the amount you withdrew. The CRA tracks your balance and sends your minimum required repayment on the HBP Statement of Account that comes with your Notice of Assessment, and you report each year's repayment on Schedule 7 of your tax return.

When repayment starts depends on when you withdrew. Under the standard rule, repayment begins the second year after your first withdrawal. But there is temporary relief: for first withdrawals made between January 1, 2022, and December 31, 2025, repayment is deferred by an extra three years, so it starts in the fifth year after your withdrawal. If you withdraw in 2025, your first repayment year is 2030.

HBP versus the FHSA, and why you can use both

The HBP is not the only first-home tool. The First Home Savings Account (FHSA) lets you contribute up to $8,000 per year to a lifetime maximum of $40,000, and unlike the HBP, FHSA withdrawals for a first home never have to be paid back.

The best part is that you do not have to choose. You can make a qualifying FHSA withdrawal and an HBP withdrawal for the same home, as long as you meet the conditions for each program at the time of each withdrawal. Stacking a $40,000 FHSA balance with a $60,000 HBP withdrawal puts $100,000 toward a single purchase from one buyer alone.

For a full breakdown of how the FHSA works on its own, read our guide to the FHSA first home savings account, the main savings tool for Edmonton first-time buyers. And if you are mapping out the whole journey, our first-time home buyer guide for Edmonton walks through every step from saving to keys.

Frequently Asked Questions

How much can I withdraw from my RRSP under the Home Buyers' Plan?

You can withdraw up to $60,000 per person, tax-free. Budget 2024 raised the limit from $35,000, and the higher amount applies to withdrawals made after April 16, 2024. A couple buying together can withdraw up to $120,000 combined if each person meets the HBP eligibility rules on their own.

Do I have to pay the HBP money back?

Yes. The HBP is a loan from your own RRSP, and you repay it over 15 years at 1/15th of the amount withdrawn each year. The CRA sends your minimum required repayment on the HBP Statement of Account with your Notice of Assessment, and you report it on Schedule 7. If you repay less than the minimum in any year, the shortfall is added to your taxable income for that year.

When do my HBP repayments start?

Under the standard rule, repayment begins the second year after the year of your first withdrawal. For first withdrawals made between January 1, 2022 and December 31, 2025, repayment is deferred by an extra three years, so it starts in the fifth year after your withdrawal. A 2025 withdrawal means your first repayment year is 2030.

Can I use the HBP and the FHSA together for the same home?

Yes. You can make a qualifying FHSA withdrawal and an HBP withdrawal for the same qualifying home, as long as you meet the conditions for each program at the time of each withdrawal. The two programs are not mutually exclusive, so you can layer FHSA savings on top of your HBP withdrawal.

Am I still a first-time buyer if I owned a home years ago?

Possibly. The HBP counts you as a first-time buyer if you did not live in a home owned by you or your current spouse or common-law partner, as your principal residence, during the four calendar years before your withdrawal or in the current year up to 30 days before you withdraw. If you sold and have rented past that window, you can qualify again.