How the Home Buyer’s Plan Works

So, you’re thinking about buying your first home—or maybe you’re finally ready after a few years of renting, saving, and watching from the sidelines. The excitement is real, but so is the question: how do I actually afford this?

For many Canadians, especially first-time buyers or those re-entering the market after a separation, the Home Buyers’ Plan (HBP) can be a game changer. It’s one of the few ways to tap into your RRSP without triggering taxes, and it can significantly boost your down payment.

Let’s walk through exactly how it works—plain and simple.

 

What Is the Home Buyers’ Plan?

The Home Buyers’ Plan allows you to withdraw up to $60,000 from your RRSP to buy or build a home, without paying tax on that withdrawal. If you’re buying with a partner and you both qualify, you can access up to $120,000 combined—a big deal for anyone trying to compete in today’s market.

It’s not free money—but it’s your money, working harder for you now. You’ll just need to repay it gradually over 15 years, starting a couple of years after your purchase.

 

Who Actually Qualifies?

To be eligible, you or your client must meet a few key requirements:

• First-time buyer status: You haven’t owned and occupied a home during the four years leading up to the withdrawal (plus the 30 days before it).

• Canadian resident: You need to be a Canadian resident at the time of withdrawal and when you buy the home.

• RRSP funds: The money you plan to withdraw must have been in your RRSP for at least 90 days.

• Purchase agreement: You need a written agreement in place to buy or build the property.

• Intent to live in the home: This must be your principal residence within one year of buying.

 

What About People Going Through Separation?

This is an important (and often misunderstood) part: even if you’ve owned a home recently, you may still qualify if you’ve been separated for at least 90 days due to a relationship breakdown. You must also not be living with a new partner or in your former shared home.

If you’re buying out your ex’s share of the home, you can even skip the requirement to sell the property—a major relief for many in this situation.

 

Is the HBP Right for You?

The HBP can give you access to a meaningful chunk of cash—money that could help avoid mortgage insurance, lower your monthly payment, or just make the whole purchase feel more manageable. But it’s not the only option, and it’s not the perfect fit for everyone.

The key is to use it strategically. That’s where I come in. If you want to explore how the HBP could work alongside your full mortgage plan (or how it compares to something like the First Home Savings Account), I’m happy to help you figure out the best move.

Buying a home is a big step. You don’t have to figure it out alone. We are always here to help.

Until next time,  Denise