RRSP Home Buyers' Plan 2026 — Full Rules + FHSA Stacking

The Home Buyers' Plan lets a first-time buyer withdraw up to $60,000 from an RRSP tax-free to buy or build a qualifying home. It is a loan from yourself: the money comes out without withholding tax, and you repay it into your RRSP over fifteen years.

Miss an annual repayment and that instalment is added to your taxable income for the year. It is not a penalty as such, but it is fully taxed at your marginal rate.

Since 2024, the same person can use the First Home Savings Account and the Home Buyers' Plan on the same purchase. This is the single largest tax-advantaged down payment strategy available in Canada.

A couple who maximize both can bring $200,000 to a down payment: 2 × $40,000 FHSA plus 2 × $60,000 HBP. Order matters — use FHSA money first because it never has to be repaid, then draw HBP for whatever gap remains.

Beyond the obvious, a larger down payment changes which rate tier you land in and whether you pay default insurance at all.

Getting to 20% eliminates the premium entirely and unlocks insurable pricing under the $1.5M ceiling. Model the difference in the CMHC premium calculator and the affordability calculator.

The rule that catches the most people: RRSP contributions must remain in the account for at least ninety days before an HBP withdrawal, or the contribution is not deductible.

Used deliberately, it becomes a strategy. If you have cash sitting outside registered accounts and unused RRSP room, contribute it, wait ninety days, then withdraw it under the HBP. You get the tax deduction on the way in and the money back out tax-free for your down payment. On $60,000 of contribution room at a 43% marginal rate that is roughly $25,800 of tax refund — refund money that can itself go toward closing costs.

Requirements: you need the RRSP contribution room, you need the cash ninety days before closing, and you need to actually file the deduction. Talk to an accountant before executing, especially if the contribution pushes you across a bracket.

Each year CRA sends a Home Buyers' Plan statement showing your balance and the minimum instalment. On a $60,000 withdrawal that is $4,000 a year for fifteen years. You designate an RRSP contribution as an HBP repayment on Schedule 7 — and a designated repayment produces no deduction, because you already claimed it.

Mistakes worth avoiding:

1. Withdrawing inside 90 days of contributing — the contribution loses its deduction.
2. Forgetting to designate the repayment on Schedule 7. The contribution is then treated as a new contribution and the instalment shows up as taxable income anyway.
3. Using HBP while FHSA room sits unused. FHSA never has to be repaid; HBP does. Fill FHSA first.
4. Draining an RRSP that holds employer-matched funds that may be locked in.
5. Assuming both partners qualify. Each is tested separately on the four-year rule — one prior owner does not disqualify the other.
6. Missing the October 1 deadline in the year after withdrawal. The full amount becomes taxable income.

Choosing to repay faster than the minimum is fine and shortens the schedule. Choosing not to repay at all is a decision to pay tax at your marginal rate on $4,000 a year — sometimes rational in a low-income year, rarely otherwise.