Quick Answer
If you make an RRSP Home Buyers’ Plan withdrawal between January 1, 2026 and December 31, 2028, you now have five years before your first repayment is due — not the standard two. Bill C-30 (the Spring Economic Update 2026 Implementation Act) enacted this change in June 2026.
A withdrawal made in 2026 means your first repayment year is 2031 instead of 2028. The total 15-year repayment period and the annual minimum of one-fifteenth of the withdrawal remain unchanged.
Why Bill C-30 Just Bought You Three Extra Years
Buying a first home in Ontario in 2025 or 2026 is a stretch by design. Prices are high, mortgage rates only recently began easing, and for many first-time buyers, dipping into an RRSP is the only way to build a competitive down payment. Under the standard rules, the tax bill for that decision arrived quickly: repayments started just two calendar years after the withdrawal, right when you were still absorbing property taxes, closing costs, and moving expenses.
Bill C-30, which became law in June 2026, changed the timeline. First-time buyers making an RRSP Home Buyers’ Plan withdrawal between January 1, 2026 and December 31, 2028 now get five years before repayments begin. That is three extra years of breathing room to settle into homeownership before the CRA expects the first instalment. Alongside broader tax shifts affecting Canadian homeowners, this extension quietly reshapes how new buyers should budget for the first half-decade in their home.
Quick Start — Pick Your Path
What Bill C-30 Actually Changed
The Home Buyers’ Plan (HBP) is a federal program administered by the Canada Revenue Agency (CRA) that lets first-time buyers withdraw up to $60,000 from their RRSP to buy or build a qualifying home. Under the original rule, you had to start repaying the withdrawal by the second year after your first withdrawal. The 2024 federal budget introduced a temporary five-year grace period for withdrawals made between 2022 and 2025. Bill C-30 extends that same relief to a new cohort: first-time buyers who make their initial HBP withdrawal in 2026, 2027, or 2028.
For a withdrawal made in 2026, your first repayment year moves from 2028 to 2031. Nothing else about the program changed: you still have a total of 15 years to repay, and each year’s minimum is one-fifteenth of the original withdrawal amount. Once the eligibility window closes on December 31, 2028, withdrawals revert to the standard two-year grace period. Our retirement planning fundamentals guide shows how the HBP fits into a broader savings picture.
Salaried Employee vs Sole Proprietor vs Incorporated Professional
The five-year grace period looks identical on paper for every eligible taxpayer, but how it actually plays out depends heavily on your income structure. Our guide on retirement savings without a guaranteed pension covers the broader planning implications for each profile.
| Profile | Cash-Flow During Grace | RRSP Room to Repay | Key Planning Note |
|---|---|---|---|
| Salaried employee (T4) | Predictable | Predictable annual contribution room | Straightforward one-fifteenth designation from year six |
| Sole proprietor | Variable | Varies with net self-employment income | Pay ahead in strong years to reduce future minimums |
| Incorporated professional | Controllable via salary vs dividend mix | Only salary generates RRSP room | Pay salary in year six to preserve room for designation |
Owner-managers who paid themselves mostly in dividends during the grace period may find they have no new RRSP contribution room to designate as an HBP repayment when year six arrives. Planning ahead is often the difference between a straightforward repayment and a scramble.
Step-by-Step Roadmap — From Withdrawal to Final Repayment
- 1Confirm first-time buyer eligibilityYou typically qualify if you (or your spouse or common-law partner) have not owned a home you lived in as your principal residence during the four calendar years before your withdrawal. Exceptions apply for buyers with disabilities and following relationship breakdowns.
- 2Verify the 90-day contribution ruleAny contribution to your RRSP must sit for at least 90 days before it is withdrawn under the HBP if you want the contribution to be fully tax-deductible. A December contribution followed by a January withdrawal typically fails this test.
- 3File Form T1036 with your RRSP issuerForm T1036 (Home Buyers’ Plan Request to Withdraw Funds from an RRSP) tells your financial institution to release funds without withholding tax. You complete Area 1; your issuer completes Area 2.
- 4Receive your T4RSP slip for the withdrawal yearYour issuer will send a T4RSP slip showing the withdrawn amount. Because the HBP treats the money as a loan, no tax is deducted at source and the amount is not included in your income.
- 5Use the five-year grace to build cash reservesThe CRA sends you an annual HBP Statement of Account starting the year after your withdrawal. It confirms your outstanding balance and the year your first repayment is due. Our Gen Z tax planning basics guide has more on building emergency reserves.
- 6Make your first repayment and designate it on Schedule 7In year six after a 2026 withdrawal (that is, 2031), contribute at least one-fifteenth of your original withdrawal to your RRSP and designate it on Schedule 7 of your T1 return. Without designation, the contribution counts as a regular RRSP deduction, not a repayment.
- 7Track all 15 annual instalmentsEach missed or short instalment gets added to your taxable income on line 12900. Keep the CRA’s annual HBP Statement of Account and your Schedule 7 filings together for the full 15-year cycle.
Common Mistakes That Trigger Unexpected CRA Bills
Even well-informed buyers make avoidable mistakes with the HBP. Six patterns come up most often in our practice:
- →Assuming the five-year grace applies to a withdrawal made in December 2025 — only first withdrawals from 2026 through 2028 qualify under Bill C-30.
- →Contributing to the RRSP fewer than 90 days before the HBP withdrawal, which can disqualify the contribution from full deductibility.
- →Forgetting to designate the repayment on Schedule 7 of your T1 return, in which case the contribution becomes a regular RRSP deposit instead of a repayment.
- →Missing an annual repayment and being surprised when the one-fifteenth minimum is added to taxable income on line 12900.
- →Withdrawing more than the $60,000 cap, which triggers withholding tax on the excess and pulls it into taxable income.
- →Selling the qualifying home in the first year of ownership, which can destabilize HBP eligibility depending on the reason for the sale.
Understanding how the HBP interacts with your other registered accounts also matters. Our guide on how to maximize your TFSA alongside your HBP covers the coordination.
Frequently Asked Questions
If I take money out of my RRSP for a house in 2026, when do I actually have to start paying it back?
Your first repayment is due in 2031 — the fifth calendar year after your withdrawal. Under Bill C-30, first HBP withdrawals made between January 1, 2026 and December 31, 2028 qualify for a five-year grace period instead of the standard two years.
Does the new five-year grace period apply to withdrawals I made in 2024 or 2025?
Yes, but under the earlier Bill C-69 provisions rather than Bill C-30. The 2024 federal budget already extended the five-year grace to first withdrawals made from January 1, 2022 through December 31, 2025. Your existing repayment schedule remains valid.
What is the maximum I can withdraw from my RRSP under the Home Buyers’ Plan in 2026?
The maximum is $60,000, raised from $35,000 by the 2024 federal budget. Couples can each withdraw up to $60,000 for the same qualifying home, provided each spouse meets the first-time buyer test independently.
What happens if I skip an annual HBP repayment — will the CRA charge a penalty?
There is no separate penalty, but the missed one-fifteenth amount is added to your taxable income for that year on line 12900 of your T1 return. You typically pay tax on it at your marginal rate, which can push you into a higher bracket.
Can I use both the FHSA and the Home Buyers’ Plan for the same home purchase?
Yes. The First Home Savings Account (FHSA) and the HBP are separate registered plans with their own rules. You can combine an FHSA withdrawal (which is not repayable) with an HBP withdrawal (which is) toward the same qualifying home.
If I make my HBP withdrawal on December 31, 2028, do I still get the full five-year grace?
Yes, provided that is your first HBP withdrawal. The five-year grace applies to first withdrawals made through December 31, 2028. Withdrawals on or after January 1, 2029 revert to the standard two-year grace period unless further legislation extends it.
How do I actually report an HBP repayment on my tax return?
Contribute the amount to your RRSP, then complete Schedule 7 of your T1 return to designate that contribution as an HBP repayment. Without the designation, the CRA treats it as a regular deductible RRSP contribution rather than a repayment.
What if I sell the home within a couple of years — does that change my HBP repayment obligation?
Selling the home does not cancel your HBP obligation. You still owe the annual one-fifteenth repayment until the full withdrawal amount is returned to your RRSP. Special rules can apply if the sale relates to a marriage breakdown or death.
Browse more tax and accounting insights tailored to Ontario homeowners and small business owners.
Where ClearWealth Fits In
Two headline shifts define the current HBP landscape: a five-year grace period instead of two, and a limited 2026 to 2028 eligibility window. Getting the timing right — the 90-day contribution rule, the Schedule 7 designation, the annual one-fifteenth minimum — is where careful planning pays off. Our team helps Ontario first-time buyers time their withdrawals, structure their Schedule 7 filings, and steer clear of the six common mistakes above.
Ready to Plan Your HBP Strategy?
ClearWealth Accounting Advisors helps Ontario first-time buyers time HBP withdrawals, structure Schedule 7 designations, and avoid costly repayment mistakes.
Book a ConsultationSources & References
- Department of Finance Canada — Legislation passes to implement measures from Spring Economic Update 2026 — https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html
- Parliament of Canada — Bill C-30, Spring Economic Update 2026 Implementation Act (Royal Assent) — https://www.parl.ca/DocumentViewer/en/45-1/bill/C-30/royal-assent
- Canada Revenue Agency — What is the Home Buyers’ Plan (HBP) — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
- Canada Revenue Agency — How to participate in the HBP (Form T1036) — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/how-participate-home-buyers-plan.html
- Canada Revenue Agency — Repaying funds withdrawn under the HBP — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/repay-funds-withdrawn-rrsp-s-under-home-buyers-plan.html
- Income Tax Act, s. 146.01 — RRSP Home Buyers’ Plan provisions — https://laws-lois.justice.gc.ca/eng/acts/i-3.3/section-146.01.html
