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
Toronto condos 
Toronto purpose-built/Shutterstock 
Hudson’s Bay vacated about as much space as Target did in 2015. (JLL)
