The RRSP Home Buyers' Plan after the $60K bump

The Home Buyers' Plan lets a first-time buyer pull up to $60,000 out of their RRSP toward a down payment without paying tax on the withdrawal, or $120,000 for a couple where both people qualify. The cap jumped from $35,000 to $60,000 in April 2024, and that change turned the plan from a nice little bonus into real money at GTA prices.

Think of it as an interest-free loan you give yourself out of your own retirement savings. And like any loan, what matters is the fine print, not the headline number.

The rules you have to follow

• The 90-day rule.The money has to sit in your RRSP for at least 90 days before you withdraw it under the plan, or you lose the tax deduction on that contribution. If your closing is three months away and you're topping up the RRSP to pull out more, count the days carefully first.
• Who qualifies.There's a four-year look-back. You (and your spouse or common-law partner) can't have lived in a home you owned this calendar year or in the four before it. It's the same test the FHSA and the GST rebate on new builds use, and it's more forgiving than the land transfer tax rebates, which need you to have never owned a home anywhere.
• The paperwork. A Form T1036 for each withdrawal, a signed purchase agreement in hand, and a genuine plan to move into the home as your principal residence within a year of buying it.

Repayment – where people get surprised

You pay the money back into your RRSP over 15 years, at least one-fifteenth of it a year. These repayments aren't fresh contributions. You flag them as repayments on your tax return, and they don't earn you a second deduction.

Miss a year and nothing dramatic happens. No call from the CRA, no penalty letter. That year's minimum just gets added to your taxable income, so you end up paying tax on money you already spent on a house. On a full $60,000 withdrawal, the minimum works out to $4,000 a year, and skipping it in a 33% tax bracket costs you about $1,320 in tax, every year you skip it.

When repayment starts depends on when you took the money out. Normally it's the second year after the withdrawal. Withdrawals made between January 2022 and the end of 2025 got a temporary break, where repayment doesn't start until the fifth year. A 2026 withdrawal is back on the normal schedule, so money you pull this year starts repaying in 2028.

When not to drain the RRSP

The real cost of the plan isn't the repayment schedule. It's the growth you give up while the money is out. $60,000 taken out of an RRSP and dribbled back in over 15 years ends up worth noticeably less than $60,000 that you just left alone to grow. And that gap gets bigger the younger you are and the better your investments do.

Times I'd tell someone to slow down before signing that T1036:

• The withdrawal barely changes your mortgage.If putting another $20,000 down doesn't push you past a premium tier or take a real bite out of the payment, your RRSP might be doing more good right where it is.
• You'd have to sell investments while they're down to fund it. Pulling money out means selling something. When you sell matters.
• The repayments would crowd out any new saving. If $4,000 a year going back in means you put nothing new into an RRSP or FHSA for 15 years, the plan is quietly eating its own tail.

And the other side of it: if the withdrawal is what gets you from 15% down to 20%, wiping out the mortgage insurance premium completely, the numbers usually come down hard in favour of using it. Those thresholds change everything, and the calculator shows you exactly where you land.

Stacking with the FHSA

You're allowed to use the plan and a First Home Savings Accounton the same purchase. The FHSA is the better dollar to spend first, because you never repay it and never pay tax on it, so for most buyers the order is FHSA up to its cap, then the Home Buyers' Plan for the rest. And if you're short on both RRSP room and FHSA room, remember the FHSA-to-RRSP transfer works the other way too. FHSA money you never end up using for a home can move into your RRSP without using up any of your RRSP room.

If you're trying to work out what your registered accounts actually add up to by the time you're at a closing table, that's a conversation I have most weeks. Bring your notice of assessment and twenty minutes.