We speak to many buyers who dream of buying their first home in Canada, and we know that your first home may feel out of reach right now. Saving up for a down payment on top of rent and closing costs in today’s tough economy can feel overwhelming or impossible. 

In this article, we’re going to talk about how to use your Registered Retirement Savings Plan (RRSP) together with the Home Buyers’ Plan (HBP) to generate usable cash and shorten your timeline to purchase.

The goal is to show you how the rules work this year so you can structure your plan and act before the spring or summer of 2026.

We know that this article may contain a lot of information, so if you are still confused or have additional questions after reading this guide, feel free to reach out to us directly, and we’ll be happy to help you further.

If you’re a first-time homebuyer, we suggest you read this article first: What You Need To Know As A First-Time Homebuyer.

The deadline to contribute to your RRSP and claim the deduction on your 2025 tax return is March 2, 2026. If you make contributions by that date, you can use those contributions on your 2025 taxes and expect a tax refund in spring 2026. This refund can go toward your homebuying plan, including a larger down payment or your closing costs.

The Home Buyers’ Plan is a federal program that lets eligible first-time homebuyers withdraw up to $60,000 from their RRSP without immediate tax, as long as they repay it over time. You don’t pay tax on the withdrawal itself (because it isn’t considered income), but you have to pay the money back within 15 years.

That means your retirement savings can become working cash for your down payment or closing costs. If you’re buying with a partner and you both qualify, you could double that amount.

To withdraw under the HBP, you must:

• Plan to buy or build a qualifying home for yourself (or a related disabled person).
• Intend to occupy the home as your principal residence.
• Complete CRA Form T1036, Home Buyers’ Plan Request to Withdraw Funds from an RRSP, with your RRSP issuer.
• Be a first-time homebuyer or meet the CRA’s first-time criteria.

A lot of people are surprised to learn that you can buy more than one home and still be considered a first-time homebuyer. According to the Canada Revenue Agency, you are considered a first-time home buyer if all of the following are true:

• You did not own and live in another qualifying home in the current year or in the previous four calendar years.
  
• A “qualifying home” includes any home you owned and occupied as your principal residence, whether alone or jointly.
  
• If you owned a home in the past but did not live in it as your principal residence, that ownership alone does not automatically disqualify you.
  
• If you previously owned a home with a spouse or common-law partner, and lived in it as your principal residence, you are not considered a first-time buyer until the four-year rule is satisfied.
  
• If you are buying with a spouse or partner, each person’s first-time status is assessed individually.
  
• You must be a resident of Canada at the time you withdraw funds under the HBP.
  
• You must intend to buy or build a qualifying home and occupy it as your principal residence within one year of purchase or completion.

Here is some clarification that often causes confusion:

• The four-year period is counted as four full calendar years, not four years from the sale date.
  
• Renting, living with family, or living in a partner’s home does not reset or violate first-time buyer status unless you owned and lived in that home.
  
• There is a separate exception that may allow HBP use for individuals experiencing a breakdown of a marriage or common-law partnership, even if they owned a home before.

If you want the official CRA reference page that explains this in full detail (including examples), it’s here: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html

Here are the steps you need to follow for this year:

1. Make RRSP contributions before March 2, 2026 and plan to claim them on your 2025 taxes. This sets you up for a refund in 2026.
2. File your tax return early in 2026 to get your refund as soon as possible.
3. Use that refund as part of your savings toward your purchase.
4. When you’re ready to close on a qualifying home, withdraw up to $60,000 under the HBP to supplement your down payment.

Many buyers underestimate that an RRSP refund becomes a liquid cash event you can plan around. When you add this refund to an HBP withdrawal, it creates real buying power without tax.