How to participate in the Home Buyers' Plan (HBP)

The Home Buyers' Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. The HBP allows you to pay back the withdrawn funds within a 15-year period.

You can withdraw funds from more than one RRSP as long as you are the owner of each RRSP account. Your RRSP issuer will not withhold tax on withdrawn amounts of $35,000 or less. Some RRSPs, such as locked-in or group RRSPs, do not allow you to withdraw funds from them.

Certain conditions must be met in order to be eligible to participate in the HBP, including the following:

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Do you meet the HBP eligibility conditions?

Or

Note

If you are withdrawing funds from your RRSPs to help a related person with a disability buy or build a qualifying home, it is the related person with a disability who must have entered into such an agreement.

To participate in the HBP, you must meet all HBP eligibility conditions that apply to you.

Notes

You are responsible for making sure that all HBP conditions are met (see the eligibility questions in Area 1 of Form T1036, Home buyers’ plan (HBP) Request to withdraw Funds from an RRSP). If you make an RRSP withdrawal under the HBP and a condition is not met, your RRSP withdrawal(s) may be considered ineligible.

If your RRSP withdrawal(s) are considered ineligible, you will have to include part or all of the withdrawal(s) as income on your income tax and benefit return for the year you received the funds.

If we have already assessed your income tax and benefit return for that year, we will reassess it to include the withdrawal(s). If you do not meet the conditions to participate in the HBP in the current year, you may be able to participate in future years.

CRA may contact you to ask for more information about your HBP withdrawal after you submit your documentation.

Are you a first-time home buyer?

Unless you are a person with a disability or you are helping a related person with a disability to buy or build a qualifying home, you have to be a first-time home buyer to withdraw funds from your RRSP(s) to buy or build a qualifying home.

You are considered a first-time home buyer if, in the four-year period, you did not occupy a home that you or your current spouse or common-law partner owned.

Note

Even if you or your spouse or common-law partner has previously owned a home, you may still be considered a first-time home buyer.

If you have a spouse or common-law partner, it is possible that only one of you is a first-time home buyer.

The four-year period

Begins on January 1st of the fourth year before the year you withdraw the funds from your RRSP.

Ends 31 days before the date you withdraw the funds.

For example, if you withdraw funds on July 31, 2022, the four-year period begins on January 1, 2018 and ends on June 30, 2022.

Breakdown of a Marriage or Common-Law Partnership

Generally, you will not be prevented from participating in the HBP if you do not meet the first-time home buyer requirement, provided that you live separate and apart from your spouse or common-law partner for a period of at least 90 days as a result of a breakdown in your marriage or common-law partnership. You will be able to make a withdrawal under the HBP if you live separate and apart from your spouse or common-law partner at the time of the withdrawal and began to live separate and apart in the year in which the withdrawal is made, or any time in the four preceding years. However, in the case where your principal place of residence is a home owned and occupied by a new spouse or common-law partner, you will not be able to make an HBP withdrawal under these rules.

You will be required to dispose of their previous principal place of residence no later than two years after the end of the year in which the HBP withdrawal is made. The requirement to dispose of the previous principal place of residence will be waived if you buy out the share of the residence owned by your spouse or common-law partner. The existing rule that individuals may not acquire the home more than 30 days before making the HBP withdrawal will also be waived in this circumstance.

Existing HBP rules will otherwise generally apply. For example, your outstanding HBP balance must be nil at the beginning of the year in which you make an HBP withdrawal.

This measure applies to HBP withdrawals made after 2019.

Can you participate in the HBP later?

If you are not considered a first-time buyer now, you may be considered a first-time home buyer later, once the four-year period has passed.

For example, if in 2016 you sold the home you lived in before, you may be able to participate in 2022 or if you sold the home in 2017, you may be able to participate in 2023. 

Are you building or buying a qualifying home?

You are considered to buy or build a qualifying home if:

Note

We consider you to have built a qualifying home on the date it becomes habitable.

If you do not buy or build the qualifying home before January 1st of the year after the year you withdrew the funds, you can:

A replacement property has to meet the same conditions as a qualifying home. To inform us that you are buying or building a replacement property, send a letter to one of the following addresses:

If your residential address is in Ontario, Prince Edward Island, Newfoundland and Labrador, Yukon, Nunavut, Northwest Territories or in the following cities in the province of Quebec (Montréal, Québec City, Laval, Sherbrooke, Gatineau and Longueuil), send your request to:

Revenue Canada Agency
Sudbury Tax Centre
Pension Workflow Team
Post Office Box 20000, Station A
Sudbury ON  P3A 5C1

If your residential address is in Manitoba, Saskatchewan, Alberta, British Columbia, Nova Scotia, New Brunswick or a location in the province of Quebec not listed under the Sudbury Tax Centre, send your request to:

Revenue Canada Agency
Winnipeg Tax Centre
Pension Workflow Team
Post Office Box 14000, Station Main
Winnipeg MB  R3C 3M2

Provide your name, address, and social insurance number, as well as the address of the replacement property. You have to say in the letter that you intend to occupy the replacement property as your principal place of residence within one year after you buy or build it.

Note

If you already withdrew, from your RRSPs, the $35,000 maximum allowed under the HBP, you cannot make any more HBP withdrawals to buy or build the replacement property.

Extensions for buying or building a qualifying home or replacement property

If you do not buy or build the qualifying home you indicated on Form T1036 (or a replacement property) before January 1st of the year after the year you withdrew the funds, we still consider you to have met the deadline if either of the following situations applies:

Participating in the HBP for a related person with a disability

Under the HBP, the home must better fit the needs of the disabled person than their current home. You can withdraw funds from your RRSPs under the HBP to buy or build a home, if:

Regardless of the situation, you are responsible for making sure that all applicable HBP conditions are met.

If, at any time during your participation period, a condition is not met, your withdrawal will not be considered eligible and it will have to be included as income on your income tax and benefit return for the year it is received.

Is my Home Buyers’ Plan balance up to date?

(If you have never participated in the HBP this section does not apply.)

If you have previously participated in the HBP, you may be able to do so again if:

Your HBP balance from your last participation is zero when the total of your yearly designated HBP repayments and any amounts included in your income (because no designated HBP repayment was made as required for a given year) equals the total eligible withdrawals you made from your RRSP under your participation in the HBP.

Note

The RRSP, PRPP, or SPP contributions you make in the first 60 days of a year, and designate as HBP repayments for the previous year reduce your HBP balance for purposes of determining whether your balance is zero on January 1st of the current year. For more information about designating HBP repayments, see repaying your withdrawals.

Do you meet the RRSP withdrawal conditions?

You can withdraw a single amount or make a series of withdrawals in the same calendar year. However, you cannot withdraw more than $35,000.

To withdraw funds from your RRSPs under the HBP, fill out Form T1036, Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP. In certain situations, we will consider extensions for buying or building a qualifying home or replacement property.

Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP, or they may not be deductible for any year.

Your RRSP deduction may be affected by your participation in the HBP

If you participate in the HBP, certain rules limit the deduction of your RRSP contributions made during the 89-day period before you withdrew the funds under the HBP. Under these rules, you may not be able to deduct part or all of the contributions made during this period for any year.

The following conditions must also be met in order to be eligible to participate in the HBP:

To determine the part of the contributions you, your spouse or common-law partner made to an RRSP that are not deductible for any year, you can use this chart to make the calculation.

Note

You are responsible for making sure that all HBP conditions are met. If you make an RRSP withdrawal under the HBP and a condition is not met, your RRSP withdrawal(s) may not be considered eligible. You will have to include part or all of the withdrawal(s) as income on your income tax and benefit return for the year you received the funds. If we have already assessed your income tax and benefit return for that year, we will reassess it to include the withdrawal(s). If you do not meet the conditions to participate in the HBP in the current year, you may be able to participate in future years.

Are you a resident of Canada?

You have to be a resident of Canada when you receive funds from your RRSPs under the HBP and up to the time you buy or build a qualifying home. For more information about residency status, see Residency status or call 1-800-959-8281 (toll free within Canada and the United States), or 613-940-8495 (from outside Canada and the United States). We accept collect calls by automated response. You may hear a beep and experience a normal connection delay.

If you become a non-resident after a qualifying home is bought or built, you cannot cancel your participation in the HBP. However, special rules will apply to the repayment of your HBP balance. For more information, see the HBP participant becomes a non-resident.

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