HBP (Home Buyers’ Plan)
Definition
A federal program that lets you withdraw funds from your RRSP tax-free to buy a first home, up to $60,000 per person since April 2024, so $120,000 for an eligible couple. You must qualify as a first-time buyer under the program, which includes some people who have not owned a home in recent years, and the amount must be repaid to the RRSP over fifteen years, after a grace period before the first repayment. A missed repayment becomes taxable income for the year. Example: you withdraw $35,000 in March; the funds must have sat in the RRSP for at least 90 days, and the lender will want the RRSP statement, the withdrawal request, and the deposit into your account. The HBP can be combined with the FHSA for the same purchase. The rules evolve; confirm the conditions in force with the CRA before withdrawing.
For your plans
Check the 90-day rule and the withdrawal timing against the closing date, then build the annual repayment into the post-purchase budget. Have eligibility and current rules confirmed by the CRA or your tax adviser.