Saving for a condo down payment in Canada is one of the biggest financial hurdles first-time buyers face. One of the most powerful tools available to help is the Home Buyers' Plan, a federal program that lets you withdraw money from your RRSP tax-free and use it toward a qualifying home purchase. If you have been contributing to an RRSP and are approaching your first condo purchase, understanding how this program works could meaningfully accelerate your path to ownership.
What Is the Home Buyers' Plan?
The Home Buyers' Plan (HBP) is a program administered by the Canada Revenue Agency that allows first-time buyers to withdraw funds from their Registered Retirement Savings Plan without paying income tax on the withdrawal at the time it is made. The money is essentially borrowed from your future retirement savings, and it must be repaid over time. According to the CRA's Home Buyers' Plan page, the current maximum withdrawal limit is $60,000 per individual, a significant increase from the previous $35,000 limit, which was raised in the 2024 federal budget.
If you are buying with a partner, spouse, or co-purchaser who also qualifies, each person can withdraw up to $60,000 from their own RRSP independently, giving a qualifying couple access to up to $120,000 in combined RRSP funds for their down payment.
Does a Condo Qualify Under the HBP?
Yes. A condominium unit is explicitly listed as a qualifying home under the RRSP Home Buyers' Plan. The CRA defines qualifying homes as housing units located in Canada, including existing homes, homes under construction, single-family homes, semi-detached homes, townhouses, mobile homes, and condominium units. As long as you intend to occupy the unit as your principal place of residence within one year of purchase, your condo purchase qualifies for an HBP withdrawal.
Pre-construction condo buyers can also use the HBP, provided they have a written agreement to purchase the unit at the time of withdrawal and occupy the home within one year after it becomes available for occupancy.
Who Is Eligible to Use the Home Buyers' Plan?
Eligibility for the RRSP Home Buyers' Plan comes with several conditions that buyers must meet before making a withdrawal. The most important is the first-time home buyer requirement. The CRA defines a first-time buyer as someone who has not lived in a home they owned or that their current spouse or common-law partner owned at any point in the current calendar year or the preceding four calendar years.
The four-year lookback is critical and catches many buyers off guard. As the CRA's common HBP mistakes guide explains, if your current partner owned the home you lived in together within the last four years, you may not qualify even if you personally never owned property. Confirming eligibility with your accountant or financial advisor before making a withdrawal is essential to avoid an unintended taxable RRSP distribution.
You must also be a Canadian resident at the time of withdrawal, have a written agreement to buy or build a qualifying home, and have contributed the funds to your RRSP at least 90 days before withdrawing them. Contributions made within 90 days of the withdrawal may not be fully deductible, which limits the strategy of last-minute RRSP contributions specifically timed for an HBP withdrawal.
How the Repayment Works
The HBP withdrawal is not a gift it is an interest-free loan from your future self. The amount withdrawn must be repaid to your RRSP over 15 years, with repayments beginning in the fifth calendar year after the year of the first withdrawal. At least one-fifteenth of the total withdrawal must be repaid each year. On a $60,000 withdrawal, that works out to a minimum annual repayment of $4,000 per year for 15 years.
If you miss a year's repayment or repay less than the required minimum, the shortfall is added to your taxable income for that year and taxed at your marginal rate. As TD's Home Buyers' Plan explainer notes, repayments designated as HBP repayments on your tax return do not generate a new RRSP deduction; you cannot double-dip by treating repayments as fresh contributions that reduce your taxable income.
Extended Repayment Relief for Recent Withdrawals
A temporary measure introduced in the 2024 federal budget extended the repayment grace period for buyers who made HBP withdrawals between January 1, 2022 and December 31, 2025. These buyers have up to five years before repayments are required, rather than the standard two. This means someone who used the HBP in 2024 would not be required to begin repayments until 2029 rather than 2026.
Combining the HBP with the FHSA
One of the most powerful features of the current first-time buyer landscape is the ability to stack the RRSP Home Buyers' Plan with the First Home Savings Account. The FHSA allows first-time buyers to contribute up to $8,000 per year to a registered account, with a lifetime maximum of $40,000, and withdraw those funds completely tax-free for a qualifying home purchase. Unlike HBP withdrawals, FHSA withdrawals do not need to be repaid.
Using both programs together, a first-time buyer can access up to $100,000 in registered savings for a condo down payment, $60,000 from the HBP and $40,000 from the FHSA, without triggering tax at the time of withdrawal. For a couple where both partners qualify for both programs, the combined access is up to $200,000. This represents one of the most significant down payment acceleration tools available to Canadian first-time buyers and makes the combination strategy worth exploring carefully with a financial advisor.
Key Things to Do Before Making an HBP Withdrawal
Before withdrawing from your RRSP to buy a condo in Canada, confirm your first-time buyer status under the four-year lookback rule, ensure your contributions have been in the account for at least 90 days, have a signed written agreement for your condo purchase in place, and complete Form T1036 — the HBP Request to Withdraw Funds from an RRSP for each withdrawal you make. Working with a financial advisor or accountant ensures you structure the withdrawal correctly and understand the repayment obligations before you commit.
