5.2.4 Home Buyers Plan

The federal Home Buyers Plan allows first-time buyers to use up to $35,000 from their Registered Retirement Savings Plans (RRSP) to make a down payment. However, you have to pay it back into your RRSP within 15 years, starting from the second year after your withdrawal. If you don't pay it back, you'll have to include it in your taxable income and pay income tax on the amount due. So before using money in your RRSP, be sure you can afford the repayment, plus the payments on your mortgage.


In 2017, Martin withdraws $16,500 from his RRSP to add to his home down payment. Starting in 2019, he'll have to make payments of $1,100 a year back to his RRSP ($16,500 รท 15 years). If he decides not to make the repayment in 2019, he'll have to include $1,100 in his income when he files his 2019 income tax return. He'll still have to repay $1,100 to his RRSP in each of the following years.

Martin takes money from his RRSP to use as a down payment on a home.

To learn more, see the Canada Revenue Agency's information on the Home Buyers Plan.

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