Canada’s $60,000 Home Buyer Plan 2025: In 2025, the Canadian government enhanced the Home Buyers’ Plan (HBP), increasing the tax-free withdrawal limit from RRSPs to $60,000 per person—a substantial increase from the previous $35,000. This program helps first-time homebuyers access their retirement savings to afford a home in today’s expensive market. This guide breaks down everything you need to know about the HBP, including eligibility, how to apply, and how to maximize the benefit.
Canada’s $60,000 Home Buyer Plan 2025
The $60,000 Home Buyers’ Plan (HBP) in 2025 is a powerful tool to help first-time buyers get into the Canadian housing market. Whether you’re purchasing solo or as a couple, you can unlock up to $120,000 in tax-free funds from your RRSP. Combined with smart planning and other incentive programs like the FHSA, the HBP can make homeownership a reality much sooner. Make sure to meet the eligibility requirements, understand your repayment responsibilities, and take full advantage of all government resources available.
| Feature | Details |
|---|---|
| Withdrawal Limit | Up to $60,000 per person (as of April 16, 2024) |
| Couples’ Benefit | Up to $120,000 combined (if both partners qualify) |
| Tax-Free Withdrawal | Yes, if repaid within 15 years |
| Repayment Start | 5th year after withdrawal (2022–2025 withdrawals only) |
| Eligibility | First-time buyers or those who haven’t owned a home in 4 years |
| RRSP Holding Period | Funds must be held in RRSP 90 days prior to withdrawal |
| Application Form | Form T1036 |
| Official Info | Canada.ca – HBP |
What Is the Home Buyers’ Plan?
The Home Buyers’ Plan (HBP) is a federal program that allows you to withdraw up to $60,000 from your RRSP to buy or build a qualifying home without having to pay tax on that withdrawal—so long as you repay it over 15 years. It’s designed to support first-time homebuyers by giving them better access to a down payment.
Eligibility Criteria for the HBP
To qualify for the Home Buyers’ Plan in 2025, you must:
- Be a first-time homebuyer: You haven’t lived in a home you owned in the last 4 years.
- Be a resident of Canada: At the time of the withdrawal and until your home is bought or built.
- Have a written agreement: To buy or build a qualifying home.
- Intend to live in the home: Within 1 year after you purchase/build it.
- Have eligible RRSP funds: Your RRSP contribution must have been held for at least 90 days before withdrawal.
How to Apply for the Canada’s $60,000 Home Buyer Plan 2025?
Step 1: Confirm eligibility
Make sure you meet all of the criteria above.
Step 2: Complete Form T1036
Download and fill out Form T1036. Fill out Section 1 yourself, and your RRSP issuer will complete Section 2.
Step 3: Submit the form
Send the completed form to your RRSP provider.
Step 4: Use your funds
The funds will be released to your account. You can use them toward your home’s down payment or other purchase/building costs.
Repayment Rules for the HBP
- Repayment term: You have 15 years to repay the amount back to your RRSP.
- Start date: For withdrawals between 2022 and 2025, repayments start the 5th year after withdrawal.
- Annual minimum: Each year, repay 1/15 of the total. If you withdraw $60,000, pay back $4,000/year.
- Missed payments: If you miss a repayment, that year’s amount is added to your taxable income.
You don’t have to repay in one lump sum—but staying on schedule avoids tax penalties.
How to Maximize Your Benefits?
- Use as a couple: If you’re buying with a partner and you both qualify, you can withdraw a combined $120,000.
- Combine with FHSA: The First Home Savings Account (FHSA) allows an additional $40,000 in tax-free savings.
- Stack with provincial programs: Look into first-time buyer rebates like Ontario’s land transfer tax refund or BC’s First Time Home Buyers’ Program.
- Plan for repayment: Use your RRSP tax refunds during the 15-year repayment term to help offset your repayments.
Real-World Example
Let’s say Alex and Jamie are a couple purchasing their first home. They each withdraw $60,000 from their RRSPs under the HBP. They now have $120,000 in tax-free funds to put toward a down payment. Since they made the withdrawal in 2025, their repayment doesn’t start until 2030. They each repay $4,000/year, which they budget for using their yearly RRSP contributions and tax refunds.
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Frequently Asked Questions (FAQs)
1. Do I pay tax when I withdraw from my RRSP under HBP?
No, the HBP withdrawal is tax-free as long as you repay the amount on schedule.
2. Can I use the HBP more than once?
Yes, but only if your balance from a previous HBP has been fully repaid and you meet the first-time homebuyer definition again.
3. What happens if I don’t repay?
The amount you fail to repay in any year is added to your taxable income for that year.
4. What if I leave Canada before repayment is complete?
You must include the remaining balance in your taxable income for the year you emigrate unless you continue repaying.
5. Can I use the HBP and FHSA together?
Absolutely. The programs are complementary, allowing you to save even more toward your home tax-free.
