Home Buyer's Plan (HBP)
Learn how Canada’s Home Buyer’s Plan (HBP) lets first-time buyers use RRSP funds for a down payment, and what rules apply to repayment and eligibility.
National Bank
May 22, 2025
What is the Home Buyer's Plan (HBP)?
The Home Buyer’s Plan (HBP) is a Canadian government program that allows first-time homebuyers to withdraw up to $35,000 from their RRSP tax-free to buy or build a qualifying home.
Why the Home Buyer's Plan (HBP) Matters in Real Estate
The HBP gives buyers early access to retirement savings for a down payment or other home-related expenses. The key advantage is that the withdrawal is not taxed as long as the amount is repaid to the RRSP over 15 years.
Eligibility criteria include:
- Must be a first-time homebuyer (or not have owned a home in past 4 years)
- Must have a written agreement to buy or build a home
- Home must be intended as a principal residence
Buyers can withdraw up to $35,000 per person, or $70,000 for couples. The repayment schedule begins the second year after the withdrawal, with minimum annual repayments required.
Failing to repay the required annual portion results in the amount being taxed as income. The HBP helps reduce reliance on larger mortgages but requires disciplined financial planning.
It is often used alongside other programs like the First-Time Home Buyer Incentive for a more affordable entry into the housing market.
Example of a Home Buyer's Plan (HBP)?
A couple withdraws $70,000 total from their RRSPs through the HBP to cover their down payment. They begin repaying $4,667 annually two years later.
Key Takeaways
- Withdraw up to $35,000 tax-free from RRSP.
- Must repay over 15 years.
- Designed for first-time buyers.
- Helps reduce down payment burden.
- Must meet eligibility and repayment conditions.
Related Terms
- RRSP
- First-Time Home Buyer RRSP Withdrawal
- Down Payment
- Mortgage Qualification
- Tax-Free Withdrawal
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
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)