RRSP Home Buyers' Plan (HBP)

What it means

The Home Buyers' Plan lets a first-time home buyer withdraw up to a set limit from their RRSP, tax-free, to put toward a down payment. Unlike a normal RRSP withdrawal, no tax is withheld at the time — but the amount must be repaid to the RRSP over 15 years, starting the second year after the withdrawal.

Why it matters

It can meaningfully boost a down payment using money already saved, but the repayment schedule is a real, ongoing obligation — missed repayments get added to that year's taxable income instead of being forgiven.

Common misunderstandings

• •It's a repayable withdrawal, not free money — skipping a scheduled repayment doesn't cancel the obligation, it just becomes taxable income for that year.
• •The RRSP funds withdrawn generally need to have been in the account for a minimum period before they qualify.
• •It can be used alongside the FHSA and the standard First-Time Home Buyers' Tax Credit — the programs aren't mutually exclusive.

Where you'll see it

In first-time home buyer down payment planning, alongside the FHSA and TFSA.