If you have money sitting in your RRSP and you're buying your first home in the GTA, you may be able to use that money as part of your down payment — without paying tax on it. The Home Buyers' Plan (HBP) lets eligible first-time buyers withdraw up to $35,000 from their RRSP tax-free to put toward a home purchase. For couples buying together, that's up to $70,000 combined. Understanding how to use RRSP money for a down payment — and what happens if you don't follow the repayment rules — can make a meaningful difference in your buying strategy.
What Is the Home Buyers' Plan?
The Home Buyers' Plan is a federal program administered by the Canada Revenue Agency (CRA) that allows first-time homebuyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) for a qualifying home purchase. The withdrawal is not included in your income for the year — meaning you pay no tax on it at the time of withdrawal. However, the funds must be repaid to your RRSP over 15 years, starting two years after the year of withdrawal.
The program was updated in 2024 to raise the withdrawal limit from $25,000 (the previous limit for many years) to $35,000 per person. For a couple buying together, both partners can each withdraw $35,000, for a combined total of $70,000 toward the down payment.
Who Qualifies to Use RRSP for a Down Payment?
Not everyone can use their RRSP under the Home Buyers' Plan. To qualify, you must meet these conditions:
- First-time buyer rule: You must be a first-time homebuyer. Under CRA's definition, this means you (and your spouse or common-law partner, if applicable) have not owned a principal residence in the past four calendar years.
- Written agreement: You must have a written agreement to buy or build a qualifying home before October 1 of the year following your withdrawal.
- Canadian resident: You must be a Canadian resident at the time of the withdrawal and when you buy the home.
- RRSP funds must be on deposit for 90 days: Any funds you contribute to your RRSP must remain in the account for at least 90 days before you can withdraw them under the HBP. You cannot contribute money and immediately withdraw it for a home purchase.
- Intended as principal residence: The home must be your principal residence — not a rental or investment property.
The 90-Day Rule Explained
The 90-day seasoning requirement is one of the most important rules to understand when planning to use RRSP money for a down payment. If you contribute $30,000 to your RRSP today and try to withdraw it next week under the HBP, CRA will allow the withdrawal — but those specific funds will be included in your taxable income because they haven't been on deposit for 90 days. Only funds that have been in the RRSP for at least 90 days are truly tax-free under the HBP. Plan ahead: if you're buying in six months, contribute now.
How Much Can You Withdraw?
The current limit is $35,000 per person. For a couple buying together, both individuals can each make a separate HBP withdrawal — up to $70,000 combined. The withdrawal must be from your own RRSP; your spouse would need to make their own withdrawal from their own RRSP.
In practice, GTA buyers use HBP funds as part of a larger down payment strategy. For a $700,000 home purchase requiring a 10% down payment ($70,000), a couple could cover the entire amount through their combined RRSP withdrawals — assuming those funds have been in their accounts for 90 days.
How the Repayment Works
Using your RRSP for a down payment is not a permanent withdrawal — it's an interest-free loan from yourself. You must repay the full amount to your RRSP over 15 years. Here's how repayment works:
- Repayment begins the second year after the calendar year you withdrew the funds (i.e., if you withdrew in 2024, repayment starts in 2026)
- You repay 1/15 of the total withdrawal per year
- If you withdrew $30,000, your annual repayment is $2,000 per year for 15 years
- You can repay more than the minimum in any given year to reduce future obligations
- If you miss a repayment installment, that year's amount is added to your taxable income
Missed repayment installments are a common issue — buyers who use their RRSP for a down payment sometimes forget to make the annual contribution. CRA does not send reminders. Track it yourself or work with a financial advisor who will flag it each year.
How to Make the Withdrawal
Withdrawing from your RRSP under the Home Buyers' Plan involves a few steps:
- Confirm your RRSP provider allows HBP withdrawals (most do)
- Complete CRA Form T1028 (Home Buyers' Plan — Request to Withdraw Funds) or your institution's equivalent
- Provide a copy of your signed agreement of purchase and sale if required
- The funds are deposited into your bank account — no tax is withheld at source
- Report the withdrawal on your annual tax return using Schedule 7
RRSP vs. FHSA for a Down Payment
In 2023, the federal government introduced the First Home Savings Account (FHSA), a registered account that lets first-time buyers save up to $8,000 per year (lifetime maximum $40,000) and withdraw funds for a home purchase without any repayment requirement. Unlike the HBP, FHSA withdrawals are a true tax-free withdrawal — you don't owe the money back.
Buyers who can contribute to both should consider using FHSA funds first, since FHSA withdrawals carry no repayment obligation. The HBP remains a useful tool when you have existing RRSP savings you want to deploy, or when you need more than $40,000.
| Feature | Home Buyers' Plan (RRSP) | First Home Savings Account (FHSA) |
|---|---|---|
| Withdrawal limit | $35,000 per person | $40,000 lifetime |
| Repayment required | Yes — over 15 years | No |
| Tax on withdrawal | None if repaid | None (ever) |
| Annual contribution limit | 18% of earned income (RRSP limit) | $8,000/year |
| First-time buyer required | Yes | Yes |
Using RRSP Money for a Down Payment in the GTA: Practical Considerations
In a GTA market where the average home price regularly exceeds $900,000 in Toronto proper and $700,000 in surrounding regions, $35,000–$70,000 from an HBP withdrawal may not cover a full down payment on its own. Most GTA buyers combine HBP funds with personal savings, FHSA withdrawals, or family gifts to reach their target down payment.
Using RRSP funds for a down payment also reduces your retirement savings temporarily — a real trade-off. However, many buyers in their 30s choose this path to enter the GTA housing market earlier, reasoning that real estate appreciation can complement long-term retirement savings. That's a personal financial decision that depends on your overall savings picture.
Before making an HBP withdrawal, confirm with your mortgage lender that the funds will be accepted as part of your down payment. Most institutional lenders accept HBP funds with the standard 90-day rule documentation. Your mortgage broker can walk you through what proof of funds your lender requires.
Learn more about how the Home Buyers' Plan works and how it connects to your overall down payment strategy. For a full picture of what's available to first-time buyers in Ontario, see our guide to first-time home buyer benefits in Ontario.
FAQ
Can I use my RRSP for a down payment if I've owned a home before?
Only if you meet the first-time buyer definition under the HBP rules. CRA defines a first-time buyer as someone who has not owned and occupied a principal residence in the four calendar years before the withdrawal. If you owned a home five or more years ago and have been renting since, you may qualify. Check your specific situation with CRA or a tax advisor.
What happens if I don't repay my RRSP after using the Home Buyers' Plan?
If you miss a required annual repayment installment, CRA adds that amount to your taxable income for that year — effectively treating it as a regular RRSP withdrawal. You'll pay tax on it at your marginal rate. This happens automatically each year you fail to repay the minimum. The balance can also become taxable if you become a non-resident of Canada.
Can both partners use their RRSP for a down payment on the same home?
Yes. Both co-purchasers — spouses or common-law partners — can each make a separate HBP withdrawal of up to $35,000, for a combined $70,000 total. Each person must meet the eligibility criteria independently, including the 90-day rule and the first-time buyer requirement.
How long do RRSP funds need to be in the account before I can withdraw them for a down payment?
At least 90 days. Any contributions made within 90 days of the withdrawal date will be included in your taxable income even if the withdrawal itself qualifies under the HBP. This is a firm CRA rule — plan contributions well in advance of your expected closing date.
Can I use an RRSP for a down payment on a condo?
Yes. The Home Buyers' Plan applies to any qualifying home, including condos, townhouses, semi-detached, and detached homes — as long as it will be your principal residence. It cannot be used for investment properties or rental purchases.
Can I use RRSP money and a gifted down payment together?
Yes. Many GTA buyers combine multiple sources: RRSP withdrawals under the HBP, FHSA funds, personal savings, and gifted funds from family. Your mortgage lender will ask for documentation on each source. There's no rule against combining them, as long as each source is properly documented.
Ready to put your down payment plan together? See how much you actually need to get started with our guide to how much down payment to buy a home in the GTA, or explore how to get mortgage pre-approval so you know exactly what you can borrow.