The Home Buyers' Plan can let eligible first-time buyers use RRSP savings toward a qualifying home without treating the withdrawal as ordinary taxable income at the time of withdrawal, provided the program rules are…
The Home Buyers' Plan can let eligible first-time buyers use RRSP savings toward a qualifying home without treating the withdrawal as ordinary taxable income at the time of withdrawal, provided the program rules are followed.
Current withdrawal limit
The Home Buyers' Plan currently allows eligible buyers to withdraw up to $60,000 from an RRSP for a qualifying home. A qualifying FHSA withdrawal and an HBP withdrawal can be used for the same home if the program conditions are met.
This is not free money
HBP withdrawals generally have to be repaid to the RRSP over the program's repayment schedule. Think about future cash flow, not just today's down payment.
It can be combined with an FHSA
An FHSA can allow an eligible first-time buyer to contribute up to $8,000 of participation room in the first year the account is opened, with qualifying withdrawals for a first home generally tax-free. Eligible buyers can use both programs for the same qualifying home if the conditions are satisfied.
Compare the opportunity cost
Withdrawing investments from an RRSP can reduce future tax-deferred growth. For some buyers the housing benefit outweighs that trade-off; for others it may not.
Plan the withdrawal before closing
Confirm deadlines, eligible amounts and documentation with the CRA guidance and your financial institution.
A practical next step
A local Ottawa real estate agent can help you turn your budget into a realistic search plan, explain neighbourhood trade-offs and coordinate the buying process with your lender and lawyer.