How to Withdraw From Your RRSP Under the Home Buyers' Plan in Ontario

The Home Buyers' Plan (HBP) lets you take money out of your RRSP to put toward a home, and the amounts you withdraw must be repaid to your RRSP over up to 15 years. If you are close to making an offer in Ontario, you want to understand how much you can take, how repayment works and what happens if you fall behind.

This article walks through those parts. Because timing and paperwork details matter a great deal, it also points out what to confirm with your RRSP issuer and the CRA before you withdraw.

How much you can withdraw

The HBP withdrawal limit is currently $60,000. The amounts you withdraw must be repaid to your RRSP over up to 15 years.

That limit is not the same as how much you need. Think about your purchase price and how much cash you need for closing costs as well as the down payment. The minimum down payment is 5% for homes of $500,000 or less, 5% of the first $500,000 plus 10% of the portion above $500,000 for homes from $500,000 to $1.5 million, and 20% for homes of $1.5 million or more.

Getting the timing and paperwork right

Two things tend to trip people up: when you take the money out relative to closing, and whether you have the right agreement and forms in place. The specific HBP conditions on those points, including which forms you must file and any deadline tied to closing, should be confirmed directly with the CRA and your RRSP issuer before you request a withdrawal. How this applies depends on your situation, so it is worth confirming with a lawyer or accountant.

For comparison, the First Home Savings Account has strict written-agreement and timing rules of its own, including a written agreement to buy or build, and a form filed with the issuer. Do not assume the HBP follows the same timing; check each program separately.

• Confirm with the CRA and your RRSP issuer which forms and deadlines apply to your withdrawal.
• Keep a copy of your signed agreement of purchase and sale.
• Make sure your closing lawyer knows when the RRSP funds will arrive.
• Ask your lender whether it needs proof of where the down payment came from.

How repayment works

The first HBP minimum repayment is about one-fifteenth of the amount withdrawn. After that, the minimum is the remaining balance divided by the years left.

A repayment counts for a year if you make it in that year or in the first 60 days of the next year, and it is designated on Schedule 7.

A temporary relief may start your repayments later. For a first HBP withdrawal made between January 1, 2022 and December 31, 2025, and under an extension for first withdrawals between January 1, 2026 and December 31, 2028, the 15-year repayment period starts in the fifth year after the year of the first withdrawal instead of the second. Confirm with the CRA that the extension applies to your withdrawal date.

What happens if you miss a repayment

If you do not make the minimum required repayment, the shortfall is added to your income as RRSP income on line 12900 of your return. That means it is taxed in that year instead of being rebuilt in your RRSP.

You can repay the full amount at any time, and doing so reduces later minimums. Paying extra when you can is one way to avoid a surprise at tax time.

Combining the HBP with other sources

The HBP does not have to be your only source. The FHSA and the HBP can be used together for the same qualifying home, as long as you meet all the conditions at the time of each withdrawal.

Other money may come from savings or from a relative. CMHC lists a non-repayable financial gift from a relative among traditional down payment sources. If you are buying with a mortgage that needs insurance, CMHC requires the purchase price to be below $1,500,000.

What to do next

• Decide how much of your RRSP you plan to use and what that means for your retirement savings.
• Work out your yearly repayment, starting from roughly one-fifteenth of what you withdraw.
• Put reminders in your calendar for the 60-day window after year end.
• Share your timeline with your mortgage professional and your closing lawyer so the funds are ready when needed.

If your situation involves a spouse, a joint purchase, or a closing date that is close to a deadline, a lawyer or accountant can confirm how the rules apply to you.

Frequently asked questions