What is the Home Buyer’s Plan (HBP)?
August 2022 – 15 min read
Under the HBP, you can withdraw up to $35,000 from your RRSP to help buy or build an eligible home.
This home can be for you, or for a related person with a disability.
You can start repaying your RRSP withdrawal at any time and have up to 15 years to repay the HBP.
Who is eligible to participate in the HBP?
Firstly, you should check if you’re eligible to participate with the RRSP you currently have, as some products such as locked-in or group RRSPs don’t allow you to withdraw funds.
You must also meet other conditions, including:
You must be a resident of Canada from the time you withdraw funds up until the qualifying home has been bought or built.
You must intend for the home to be your principal residence within 1 year of buying or building it. If you’re buying or building a home for a family member with a disability, then they must live in it as their principal residence within 1 year.
Can you exit the HBP?
Unless there are extenuating circumstances, you can’t cancel your participation in the HBP once you’ve started to withdraw funds.
You may be able to cancel however if:
You didn’t buy or build a qualifying home.
You became a non-resident before buying or building your home.
You withdrew funds to help a related person with a disability and that person didn’t buy or build a qualifying home.
You became a non-resident before that person bought or built a qualifying home.
If you choose to cancel your participation and repay the full amount into your RRSP, the withdrawal won’t be taxed. Any amount that isn’t repaid must be declared as income on your tax return for the year you made the withdrawal.
To cancel your participation, you’ll need to:
- Make a cancellation payment(s) to an existing or new RRSPs by the due date.
- Notify the CRA in writing of your intent to cancel, explaining the reason you’re no longer participating in the HBP.
- Complete Form RC471, Home Buyers' Plan (HBP) CancellationOpens a new website in a new window - Opens in a new window.
- Send the receipts for your cancellation payment(s) and any repayments, along with the letter and your completed Form RC471, to the CRA.
You can find out more about cancelling your participation in the HBP, along with where to send your documents via the Government of CanadaOpens a new website in a new window - Opens in a new window.
Starting the year you make your first HBP withdrawal, you’ll need to file an income tax and benefit returnOpens a new website in a new window - Opens in a new window every year until you’ve repaid all your withdrawals.
Remember that you’ll need to keep all supporting documents for 6 years in case the CRA asks to see them.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.