About the Canada Home Buyers Plan
The Home Buyers Plan (HBP) is a Canada Revenue Agency program that lets a first-time buyer withdraw money from a Registered Retirement Savings Plan (RRSP) without paying the withholding tax that normally applies to RRSP withdrawals. The program has existed since 1992 and was expanded most recently in the April 2024 federal budget, which raised the per-person cap from 35,000 CAD to 60,000 CAD for withdrawals made on or after 17 April 2024.
The HBP is a loan to yourself. You withdraw RRSP funds tax-free, use the cash toward a home down payment, and pay the amount back into the RRSP in 15 equal annual instalments. The first instalment is due the second calendar year after the withdrawal, so a 60,000 CAD HBP taken during 2026 must be repaid at 4,000 CAD per year from 2028 through 2042. Miss an instalment and that year's portion is added to your taxable income for that year.
How the HBP calculator works
The calculation is intentionally simple. There is no interest, no growth assumption, and no marginal-rate scaling on the withdrawal itself. The only inputs that matter are the withdrawal amount and the year you withdrew.
Annual repayment = Withdrawal amount / 15
First repayment year = Withdrawal year + 2
Missed repayment tax = Missed amount x Your marginal rate
HBP + FHSA combined = HBP (max 60,000) + FHSA (max 40,000) = up to 100,000 CAD
- Withdrawal amount: any amount up to 60,000 CAD per individual in 2026.
- 15-year repayment: fixed by statute. CRA tracks the schedule on your Notice of Assessment.
- Repayment trigger: file Schedule 7 with your T1 return each year to designate the contribution as an HBP repayment rather than a fresh RRSP contribution.
- HBP plus FHSA: since 2024 the two programs are explicitly compatible. The FHSA is more flexible because the 40,000 CAD does not have to be repaid.
Worked example: dual-income Toronto couple buying in 2026
Priya and Sam are both 32, first-time buyers, and earning roughly 110,000 CAD each in Toronto with a 38 percent combined federal-and-provincial marginal rate. They have been contributing to RRSPs and FHSAs for three years.
| Step | Priya | Sam | Combined |
|---|---|---|---|
| RRSP balance at withdrawal | 78,000 CAD | 72,000 CAD | 150,000 CAD |
| HBP withdrawal (max 60k each) | 60,000 CAD | 60,000 CAD | 120,000 CAD |
| FHSA balance (3 years x 8,000) | 24,000 CAD | 24,000 CAD | 48,000 CAD |
| Tax-free cash for down payment | 84,000 CAD | 84,000 CAD | 168,000 CAD |
| Annual HBP repayment (2028 onward) | 4,000 CAD/yr | 4,000 CAD/yr | 8,000 CAD/yr |
| Tax avoided vs cash withdrawal | 22,800 CAD | 22,800 CAD | 45,600 CAD |
Result. The couple assembles a 168,000 CAD tax-advantaged down payment, avoids about 45,600 CAD of immediate tax, and commits to 8,000 CAD per year of repayments from 2028 to 2042. On a 750,000 CAD home that is 22.4 percent down, comfortably above the CMHC 20 percent threshold to avoid mortgage default insurance.
HBP 2026 key numbers at a glance
| Item | 2026 value | Source |
|---|---|---|
| Per-person withdrawal cap | 60,000 CAD | Budget 2024, in force from 17 Apr 2024 |
| Per-couple withdrawal cap | 120,000 CAD | 2 x 60,000 if both qualify |
| Pre-2024 withdrawal cap (history) | 35,000 CAD | 2019 to 16 Apr 2024 |
| Repayment period | 15 years | Income Tax Act s.146.01 |
| Grace period (2026 withdrawal) | 2 years (repay starts 2028) | Budget 2024 (5-yr for 2022 to 2025) |
| Minimum RRSP-account-open period | 90 days before withdrawal | CRA T1036 |
| Home purchase deadline | 1 October of year after withdrawal | CRA T1036 |
| FHSA lifetime contribution cap | 40,000 CAD (8,000/yr) | FHSA rules 2026 |
| Combined HBP plus FHSA cap (single) | 100,000 CAD | HBP 60k plus FHSA 40k |
HBP vs FHSA vs taxable down payment
The HBP is rarely the only tax tool a first-time buyer should use in 2026. The FHSA has emerged as the more flexible cousin because the deposit is deductible and the withdrawal is tax-free with no 15-year repayment string attached.
| Feature | HBP | FHSA | Taxable savings |
|---|---|---|---|
| Annual cap | Up to 60,000 (one-time) | 8,000/yr to 40,000 lifetime | Unlimited |
| Deposit deductible? | Already RRSP (yes) | Yes | No |
| Growth tax-free? | Yes | Yes | No (interest/gains taxed) |
| Withdrawal tax-free? | Yes (if HBP rules met) | Yes (if first home) | Yes (already taxed) |
| Repayment required? | 15 years, 4,000/yr on 60k | None | None |
| Age eligibility | Any (must be first-time) | 18 to 71 | None |
| Maximum window to use | 1 October of year after | 15 years from account open | None |
Common HBP pitfalls
- Withdrawing within 90 days of the contribution. Money must sit in the RRSP for at least 90 days before an HBP withdrawal. A common error is contributing in January, withdrawing in February, and losing the RRSP deduction on the recent deposit.
- Missing the 1 October deadline of the year following withdrawal. If the home purchase has not closed by that date, the withdrawal becomes a taxable RRSP redemption in the year of withdrawal, with retroactive interest.
- Forgetting Schedule 7. CRA treats a deposit as a regular RRSP contribution unless you designate it as an HBP repayment on Schedule 7 of your T1. Without the designation, you owe both the repayment and an unused contribution sits in your RRSP.
- Treating the HBP as free money. A 4,000 CAD HBP repayment is not deductible. You are repaying yourself, not contributing. New deductible contributions sit on top of the repayment.
- Withdrawing from a spousal RRSP within the 3-year attribution rule. Recent spousal contributions can still be attributed back to the contributor, partially defeating the income-splitting intent.
- Not stacking with the FHSA. In 2026 these are explicitly compatible. Most first-time buyers under 40 should fund the FHSA to its 40,000 CAD lifetime cap before relying on the HBP, because the FHSA imposes no repayment.
When to use the HBP in 2026
- You have a substantial RRSP balance and you want to keep tax-deferred growth running. A standard RRSP withdrawal would trigger 10 to 30 percent withholding tax. The HBP avoids that entirely.
- You can confidently make 15 years of 4,000 CAD repayments. Job stability and adequate cash flow matter more than the loan size.
- You are already at the FHSA limit. The FHSA has no repayment burden, so fill it first if you have the room.
- You and a spouse are buying together. The 120,000 CAD per couple makes the HBP particularly powerful for dual-RRSP households.
Related calculators and country variants
Frequently asked questions about the Canada HBP
What is the Canada HBP withdrawal limit in 2026?
60,000 CAD per individual and 120,000 CAD per couple in 2026. The cap was raised from 35,000 CAD in the April 2024 federal budget for withdrawals made on or after 17 April 2024.
Can I use the HBP and FHSA together?
Yes, since 2024 the two programs stack. An individual can pair the 40,000 CAD FHSA lifetime limit with a 60,000 CAD HBP withdrawal for up to 100,000 CAD tax-free toward a first home. A married couple can stack 200,000 CAD.
What happens if I miss an HBP repayment in a given year?
The missed 1/15 portion is added to your taxable income for that year and taxed at your marginal rate. There is no separate penalty: the consequence is simply the accelerated tax that the HBP had originally deferred.
When does the HBP 15-year repayment period start?
Repayment begins in the second calendar year after the withdrawal. For a withdrawal in 2026, the first 1/15 repayment is due for the 2028 tax year (filed by April 2029). The April 2024 budget extended this grace period to 5 years for withdrawals between 2022 and 2025.
Do I have to be a first-time homebuyer to use the HBP?
Generally yes. You are considered a first-time buyer if neither you nor your spouse owned and occupied a home in the four calendar years before withdrawal. A separated spouse living apart for at least 90 days may also qualify, as may persons with disabilities buying a more accessible home.
How does the HBP compare to the US 401(k) first-time home withdrawal?
The HBP allows up to 60,000 CAD tax-free with mandatory 15-year repayment back into the RRSP. The US 401(k) hardship withdrawal for a first home is up to 10,000 USD from an IRA waiving the 10 percent penalty, but the withdrawal is still taxed as ordinary income and is not repaid. The Canadian program is much more generous because the tax deferral is preserved if you repay on schedule.
Does the HBP affect my RRSP contribution room?
No. The withdrawal does not consume contribution room. Repayments do not generate new room either: a 4,000 CAD HBP repayment is designated on Schedule 7 and does not earn a tax deduction. New contributions above the repayment continue to use deduction room as normal.
Can I withdraw less than 60,000 CAD under the HBP?
Yes. 60,000 CAD is the cap, not a floor. You can withdraw any amount up to that limit in a single year, and a top-up withdrawal in January of the following calendar year still qualifies as a single HBP event for the 15-year repayment schedule.
Sources
- Canada Revenue Agency, Home Buyers' Plan (HBP), official program overview and 60,000 CAD limit.
- Department of Finance Canada, Budget 2024 - HBP enhancements, raised the limit and extended the repayment grace period.
- CRA Form T1036, Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP.
- Income Tax Act s. 146.01, statutory framework for the HBP.
- Canada Mortgage and Housing Corporation, Mortgage Loan Insurance Premiums 2026, for the 20 percent down-payment threshold context.