First-Time Home Buyer RRSP Withdrawal
Learn how first-time buyers can use the RRSP Home Buyers’ Plan in Canada to withdraw funds for a down payment and what rules apply.
May 22, 2025
What is the First-Time Home Buyer RRSP Withdrawal?
The First-Time Home Buyer RRSP Withdrawal, also known as the Home Buyers’ Plan (HBP), allows eligible Canadians to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to buy or build their first home.
Why the First-Time Home Buyer RRSP Withdrawal Matters in Real Estate
This program provides a valuable resource for first-time buyers by enabling them to access retirement savings without immediate tax consequences.
Key features include:
- Withdraw up to $35,000 (or $70,000 per couple)
- Funds must be repaid to the RRSP over 15 years
- No tax withheld at withdrawal if conditions are met
- Must not have owned a home in the past four years
To qualify, the buyer must have a written agreement to buy or build a qualifying home. The withdrawn funds can be used for the down payment or other purchase-related expenses.
The repayment schedule begins the second year after withdrawal, with annual minimum payments. If a repayment is missed, the amount is added to the person’s taxable income for that year.
The HBP helps reduce borrowing needs and makes it easier to afford a first home. However, it’s important to understand the long-term impact on retirement savings and stay on track with repayments to avoid tax penalties.
Example
A first-time buyer withdraws $25,000 from their RRSP for a down payment. They repay $1,667 annually over 15 years to avoid tax on the withdrawal.
Key Takeaways
- Withdraw up to $35,000 from RRSP tax-free.
- Must be repaid over 15 years.
- Useful for down payments.
- Helps reduce mortgage size and interest.
- Must meet first-time buyer eligibility.
Related Terms
- Home Buyer’s Plan (HBP)
- Down Payment
- RRSP
- First-Time Home Buyer Incentive
- Tax-Free Savings Account (TFSA)
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)
