Using Your RRSP to Buy a Home in Alberta: Home Buyers’ Plan Guide

Home Buyers' Plan Basics

The Home Buyers' Plan (HBP) lets you withdraw up to $60,000 from your RRSP to buy or build a qualifying home, tax-free if repaid.

Eligibility Requirements

First-Time Buyer Definition

You're considered a first-time buyer if:

• Haven't owned a home in current year
• Haven't owned a home in previous 4 calendar years
• Spouse also meets this criteria

Other Requirements

• Must be Canadian resident
• Written agreement to buy or build
• Intend to occupy as principal residence within one year

How HBP Works

Withdrawal

• Maximum $60,000 per person ($120,000 per couple)
• RRSP contributions must be in account 90+ days before withdrawal
• Complete Form T1036 for withdrawal
• No withholding tax on qualifying withdrawal

Timing

• Must buy or build by October 1 of year following withdrawal
• Must occupy within one year of purchase
• Can make multiple withdrawals in same year

Repayment Rules

15-Year Repayment Period

• Begin repaying 2 years after withdrawal year
• Annual minimum: 1/15 of total withdrawal
• $60,000 withdrawal = $4,000/year minimum
• Can repay faster without penalty

Missing Repayments

• Missed amount added to taxable income
• Taxes owing on missed repayment
• Can't recover missed repayment opportunity

Combining HBP with FHSA

Alberta first-time buyers can use both:

• FHSA: Up to $40,000, no repayment required
• HBP: Up to $60,000 per person, must repay
• Couple maximum: $200,000 combined

Strategy Considerations

Pros of HBP

• Tax-free access to retirement savings
• 15 years to repay
• Larger down payment possible
• May avoid CMHC insurance

Cons of HBP

• Must repay (unlike FHSA)
• Loses RRSP growth during withdrawal period
• Repayment competes with other savings
• Missed repayments become taxable

Your HBP Strategy

Consider using FHSA first (no repayment), then HBP for additional funds if needed. Plan your repayment strategy before withdrawing to ensure you can meet obligations without straining your budget.