Home Buyer Plan for 2025: Buying your first home in Canada just got easier. Thanks to the Canada Home Buyers’ Plan (HBP) 2025, eligible Canadians can now withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to purchase or build their first home — tax-free. This updated policy, effective from April 16, 2024, replaces the previous withdrawal limit of $35,000, giving homebuyers more financial flexibility and support to step into an increasingly expensive real estate market.
In this article, we break down everything you need to know about the $60,000 Home Buyers’ Plan, including who qualifies, how to apply, repayment rules, and how this benefit interacts with other first-time buyer incentives. Whether you’re planning to buy a home soon or helping someone who is, this guide will help you understand the ins and outs of the updated HBP.
Home Buyer Plan for 2025
| Key Information | Details |
|---|---|
| Maximum RRSP Withdrawal | $60,000 (increased from $35,000) |
| Effective Date | Withdrawals made on or after April 16, 2024 |
| Eligibility | First-time homebuyers (not owned a home in past 4 years) |
| Repayment Period | 15 years (starts in 5th year for 2022-2025 withdrawals) |
| Can be combined with | First Home Savings Account (FHSA), Tax Credit for First-Time Buyers |
| Official CRA Website | canada.ca/hbp |
The Canada Home Buyers’ Plan 2025 is a valuable opportunity for Canadians to unlock their retirement savings to make homeownership more accessible. With the increased withdrawal limit of $60,000, buyers now have more financial muscle to tackle today’s housing market challenges.
Combined with the new First Home Savings Account (FHSA) and other tax credits and rebates, the HBP can serve as the foundation of a smart home-buying strategy. Just make sure you follow the rules, use the right forms, and plan your repayment timeline carefully.
What Is the Canada Home Buyers’ Plan (HBP)?
The Home Buyers’ Plan (HBP) is a federal initiative designed to help Canadians achieve homeownership by allowing them to tap into their retirement savings. It allows eligible first-time homebuyers to withdraw funds from their RRSP to buy or build a qualifying home. These funds are not taxed, provided you repay the amount withdrawn within a specific time frame.
For 2025, the government increased the withdrawal limit from $35,000 to $60,000, recognizing the growing challenges of affordability across the country, especially in cities like Toronto, Vancouver, and Calgary. This change is especially beneficial for younger Canadians and families looking to break into competitive housing markets.
The HBP is a flexible tool that can be used in combination with other government-backed initiatives like the First Home Savings Account (FHSA) and the First-Time Home Buyers’ Tax Credit, maximizing support for new homeowners.
Who Is Eligible for the $60,000 HBP?
You can use the updated Home Buyers’ Plan if:
- You’re a first-time home buyer, which typically means you haven’t owned a home you lived in as your principal residence in the past four years.
- You have a written agreement to purchase or build a qualifying home in Canada.
- You intend to move into the home within one year of purchase or construction.
- You are a resident of Canada at the time of the withdrawal and until the qualifying home is bought or built.
Tip: Couples can each withdraw up to $60,000 from their own RRSPs — giving a combined total of $120,000 to put toward the cost of a home. That’s a huge help when covering down payments, closing costs, and initial home upgrades!
There are also provisions for individuals helping a related person with a disability buy or build a home, expanding the benefit beyond just traditional first-time buyers.
Step-by-Step Guide: How to Use the Home Buyers’ Plan
Step 1: Confirm Eligibility
Before you begin, visit the CRA website and review the full eligibility checklist. Confirm that you’re a first-time homebuyer and meet the residency and intent-to-occupy requirements.
Step 2: Secure a Written Agreement
You must have a formal agreement to purchase or build a qualifying home. Verbal commitments, pre-approvals, or intentions don’t meet the criteria. This agreement will be required when processing your HBP application.
Step 3: Complete and Submit Form T1036
Fill out Form T1036 titled “Home Buyers’ Plan (HBP) Request to Withdraw Funds from an RRSP.”
- Submit a separate form for each withdrawal if needed.
- Hand this form to your RRSP issuer (such as your bank or investment provider).
Step 4: Withdraw Funds from Your RRSP
After your RRSP provider processes Form T1036, you can withdraw up to $60,000 tax-free.
- You can spread withdrawals across multiple transactions in the same calendar year or in the first 60 days of the following year.
- Ensure the RRSP contributions you’re withdrawing have been held in the account for at least 90 days, or they may not qualify.
Step 5: Complete Your Home Purchase or Build
Once the funds are withdrawn, your home must be bought or construction completed by October 1st of the year after the withdrawal. You must move into the home within 12 months after that date.
Step 6: Start Repaying the Withdrawn Amount
- Repayments begin in the fifth year after the year of withdrawal (only for withdrawals made between 2022 and 2025).
- You must repay at least 1/15th of the withdrawn amount every year.
- Missed repayments are considered income and taxed accordingly in that year.
Example: If you withdraw $60,000, your annual repayment is $4,000 for 15 years. Missing one year means $4,000 is added to your taxable income.
Why the Home Buyers’ Plan Is a Big Deal
Here are just a few reasons why the HBP is worth considering:
- Tax-Free Now, Repay Later: Withdraw now without tax penalties and repay over time without interest.
- Helps You Reach 20% Down Payment: With higher property values, reaching the 20% down payment to avoid CMHC insurance is tough. The $60,000 HBP helps bridge that gap.
- Boosts Your Buying Power: It increases how much you can afford upfront without impacting your monthly mortgage payments.
- Combined Savings Power: Couples can contribute a total of $120,000, enough to significantly reduce the loan amount needed.
Combining HBP with the First Home Savings Account (FHSA)
The FHSA is another powerful savings vehicle for first-time buyers. It allows Canadians to save up to $8,000 per year, to a lifetime limit of $40,000, in a tax-free account dedicated to home buying.
FHSA contributions are tax-deductible — just like RRSPs — but withdrawals for qualifying home purchases are completely tax-free, similar to a TFSA.
You can combine FHSA and HBP benefits:
- Withdraw up to $60,000 from your RRSP under the HBP
- Withdraw up to $40,000 from your FHSA
- That’s a combined $100,000 in tax-free capital for a single buyer, or up to $200,000 for a couple.
Real Example: Meet Sarah & Aman
Sarah and Aman, both 30 and living in Mississauga, dreamed of buying their first home after years of saving. The couple found a newly-built home listed at $550,000.
Here’s how they made their dream come true:
- Each withdrew $60,000 from their RRSPs under the HBP = $120,000
- They both contributed and withdrew $30,000 from their FHSAs = $60,000
- They claimed the $1,500 First-Time Home Buyers’ Tax Credit
- Total benefit and savings = $181,500
This helped them cover their down payment, legal fees, moving expenses, and even some home furnishing costs — without taking out additional loans or dipping into emergency savings.
Additional Tips for First-Time Buyers
- Start saving in your RRSP and FHSA early. The sooner you begin, the more contribution room you have.
- Work with a financial advisor to create a withdrawal and repayment plan.
- Use mortgage pre-approval tools to understand your budget before committing.
- Combine multiple government incentives like provincial land transfer rebates, GST/HST new housing rebates, and municipal grants where applicable.
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Frequently Asked Questions for Home Buyer Plan for 2025
Can I use the Home Buyers’ Plan more than once?
Yes, but only if your first HBP is fully repaid and you meet the first-time buyer criteria again.
What if I miss a repayment year?
The unpaid portion will be added to your taxable income for that year and taxed at your marginal rate.
Can I use the HBP for someone with a disability?
Yes. Even if you are not a first-time buyer, you can use the HBP to buy or build a home for a relative with a disability if the home is suitable for their needs.
Is there a deadline to use the funds?
Yes. The home must be purchased or built by October 1 of the year following your RRSP withdrawal.
Do RRSP funds need to be held for a minimum time?
Yes, the RRSP contribution must remain in the account for at least 90 days before it can be withdrawn under the HBP.
