How does the home buyers plan work?

Thinking about buying your first home? If you have contributed to a Registered Retirement Savings Plan (and have not accessed funds previously), you are eligible for the Home Buyers Plan which enables you to borrow from the RRSP to purchase a home.

So how exactly does the home buyers plan work? Here are a few rules to keep in mind:.  

  • The amount that is borrowed has to be contributed at least 90 days before it is leveraged for the HBP.
  • An amount of $25,000 can be borrowed up to a max of $35,000 (for first time home buyers).  
  • The amount borrowed from the RRSP must be paid back over a maximum of 15 years.  So you will need to make a minimum payment of the portion borrowed, a minimum of 1/15 of the amount, each year.  

What if I miss repayment?

If the amount has not been paid back in the HBP that is designated (the amount required to be paid back for that year) it is considered an inclusion to the taxpayer’s income. The minimum amount is included as income.

How does repayment to the Home Buyers Plan work?

RRSP’s have to be purchased and designated as a repayment using Schedule 7 in the Federal Form. The RRSP amount (or portion for repayment of the HBP) must be designated in the form, stating the amount paid back and included with the tax return.  There is a required minimum that must be repaid that is on the previous years tax assessment noted by the government.

Does a RPP count as a contribution towards the HBP repayment?

Unfortunately no. The amount was borrowed from an RRSP and it is an RRSP that is required as a repayment.

Have a question about Home Buyers Plan and taxes? Reach out to Susan at