How Does the RRSP Home Buyers’ Plan Repayment Work?

The Home Buyers’ Plan allows an eligible person to withdraw up to $60,000 from their RRSP to buy or build a qualifying home.

A qualifying withdrawal is not included as taxable income when it is withdrawn. Unlike a qualifying FHSA withdrawal, however, the amount taken from the RRSP generally needs to be repaid.

The Home Buyers’ Plan may also be used alongside a qualifying FHSA withdrawal when the requirements for both programs are met.

Under the regular Home Buyers’ Plan rules, the repayment period generally begins in the second year after the year of your first withdrawal.

Temporary repayment relief currently changes that timing for some participants. If your first Home Buyers’ Plan withdrawal was made between January 1, 2022 and December 31, 2025, the repayment period generally begins in the fifth year after the year of withdrawal.

The federal government has proposed extending this relief to qualifying first withdrawals made through 2028. Because proposed measures can change before becoming law, confirm your repayment start date through your CRA account and your most recent Home Buyers’ Plan statement.

Your required repayment is generally based on your outstanding Home Buyers’ Plan balance and the number of years remaining in your repayment period.

At the beginning of a standard 15-year repayment period, the minimum is commonly one-fifteenth of the amount that needs to be repaid. The calculation can change if you repay more or less than the required amount in an earlier year.

Your annual Home Buyers’ Plan statement from the CRA shows your remaining balance, the amount repaid, and the minimum repayment required for the following year.

A Home Buyers’ Plan repayment begins with a contribution to your RRSP. When you complete your tax return, you designate the amount of that contribution that should count as your repayment.

The designation is reported on Schedule 7 of your income tax and benefit return.

The part designated as a Home Buyers’ Plan repayment is not deductible from your income. It also does not use your RRSP deduction limit because it is returning money previously withdrawn through the plan.

Simply contributing to an RRSP does not automatically identify the contribution as a Home Buyers’ Plan repayment. The amount needs to be designated correctly when you file your return.

If your designated repayment is less than the minimum required for the year, the difference is generally included as RRSP income on your tax return.

That amount is also deducted from your outstanding Home Buyers’ Plan balance. It does not remain available for repayment in a later year.

The additional taxable income may affect the tax you owe for that year. The result will depend on your income and overall tax situation.

Yes. You may designate more than the annual minimum or repay the full outstanding balance early.

An additional repayment reduces your remaining Home Buyers’ Plan balance. The minimum required in future years will be calculated using the balance that remains.

Whether an early repayment fits your plans depends on your cash flow, other savings goals, and tax situation. A financial or tax professional can help you compare the available options.

No. A Home Buyers’ Plan repayment needs to be made through an eligible RRSP contribution and designated as a repayment.

An FHSA contribution or qualifying FHSA withdrawal does not repay an amount withdrawn from your RRSP through the Home Buyers’ Plan.

The two programs can work together during a qualifying home purchase, but they have different contribution, withdrawal, and repayment rules.