Withdrawal

• You (and your spouse) can each “borrow” up to $60,000 from your RRSP to use toward the purchase of a home
• To qualify, you or your spouse must not have owned a home during the last five years
• You must file form T1036 (signed by your financial institution)
• You are given until October 1 of the year following the RRSP withdrawal to purchase a home
• If you fail to purchase a home by the October 1 deadline, you can return your funds to the RRSP by December 31 of that year without penalty
• You cannot withdraw money from an RRSP that has been contributed within 90 days, otherwise it will be taxed to you

Repayment

• The money you borrow must be repaid in annual instalments over a 15-year period or sooner
• Each year the Canada Revenue Agency will send you a Home Buyers’ Plan Statement of Account, which will indicate the repayment you have to make for the next year
• Repayment begins no later than 60 days after the second year following the withdrawal
• For example, for a withdrawal during 2025, the 1st repayment is due by February 29, 2028 (60 days following 2027 year-end)
• Amounts designated as repayments are not deductible from income, and have no effect on your RRSP contribution limits since they represent repayment of money borrowed from the plan
• If you do not make the required payment for any particular year, the shortfall for that year will be added to your income

Extended Repayment Grace Period:

For individuals making their first HBP withdrawal between January 1, 2022, and December 31, 2025, the Canadian government has temporarily extended the grace period before repayments must begin:

• Previous Rule: Repayments commenced in the second year following the year of withdrawal.
• Updated Rule: Repayments now commence in the fifth year following the year of withdrawal.

This extension provides an additional three years before the onset of the repayment period.

Other

Complications can arise where there are special circumstances such as;

• Overpayment or underpayment in a particular year
• Contributions to spousal plans
• Age (over 71)
• Emigration
• Death

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