The RRSP Home Buyers' Plan in 2026: How Much You Can Withdraw and What It Costs Later
The Home Buyers' Plan lets you pull up to $60,000 from your RRSP tax-free toward a North Shore down payment. Here's how it works, and the repayment timeline that's changing for withdrawals made this year.
“• Eligible first-time buyers can withdraw up to $60,000 from their RRSP tax-free under the federal Home Buyers’ Plan, or up to $120,000 combined for a couple buying together.
• The withdrawal has to be repaid to your RRSP over 15 years, and for money withdrawn in 2026, repayment starts the second year after your withdrawal.
• Miss a scheduled repayment and that year’s missed portion becomes taxable income, so it’s worth building the repayment schedule into your budget from day one.”
How the Home Buyers' Plan Works
The federal Home Buyers' Plan (HBP) lets eligible first-time buyers withdraw money from their RRSP to put toward a home purchase, without paying tax on the withdrawal the way you normally would. The current limit is $60,000 per person, raised from $35,000 for withdrawals made after April 16, 2024. If you're buying with a partner and you're both eligible, you can each withdraw up to $60,000, for a combined total of up to $120,000 toward the same purchase.
To use it, you'll complete Form T1036 with your RRSP issuer, who then releases the funds without withholding tax, provided you meet the program's rules. "First-time buyer" for HBP purposes is broader than it sounds, generally it means you (or your spouse) haven't owned a home you lived in as your principal residence within the past four years, not that you've literally never owned property.
The Repayment Timeline, and What's Changing in 2026
This is the part that trips people up. The money isn't free, it has to go back into your RRSP over 15 years, in annual instalments of roughly 1/15 of the amount you withdrew. On a full $60,000 withdrawal, that works out to about $4,000 a year.
Here's the detail specific to 2026: when the grace period before repayment begins starts depends on when you withdrew. Withdrawals made between 2022 and 2025 were given an extended 5-year grace period before repayments needed to start. Withdrawals made from January 1, 2026 onward revert to the standard rule, a 2-year grace period, meaning repayment begins the second year after your withdrawal. If you're planning an HBP withdrawal this year, budget for that shorter runway rather than assuming you have five years before payments start.
If you miss a scheduled annual repayment, the missed amount doesn't just roll forward quietly, it gets added to your taxable income for that year. It's a manageable rule if you plan for it, and a genuinely costly surprise if you don't.
What This Means for You
The Home Buyers' Plan is a real tool for boosting your down payment, but I'd treat it as a loan from your future self, not free money. Before you withdraw, work out what your annual repayment will actually look like given the shorter 2026 grace period, and build that into your household budget now rather than five years from now when it suddenly shows up. If you're using this alongside other down payment sources, like home equity from a current property, it's worth mapping out the full picture with a mortgage broker before you commit to a withdrawal amount.
Questions About Using Your RRSP for a Purchase?
The HBP rules interact with your specific tax situation and timeline in ways that are worth confirming before you withdraw anything. If you're weighing this as part of your down payment plan for a North Shore purchase, send me a message and I'll help you think through the timing.
About Matt Council
Matt Council is a top-performing North Vancouver Realtor and West Van specialist with a background in finance. He moves beyond the sales hype to offer clients a data-driven, pressure-free approach to buying and selling real estate on the North Shore. Whether you are evaluating a presale in Lower Lonsdale or a detached home in Lynn Valley, Matt helps you understand the numbers behind the move.
Thinking of making a move? Let’s run the numbers.