The Home Buyers’ Plan (HBP) is a powerful financial tool available to Canadians looking to purchase their first home. It allows eligible individuals to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use as a down payment, making homeownership more accessible — especially in thriving real estate markets like Edmonton, St. Albert, and Sturgeon County.
What Is the Home Buyers’ Plan (HBP)?
The HBP is a program administered by the Canada Revenue Agency (CRA) that enables first-time homebuyers to withdraw up to $35,000 from their RRSP without paying immediate tax on the amount. Couples purchasing a home together can combine their withdrawals, allowing up to $70,000 toward a down payment. This program helps reduce reliance on higher-ratio mortgages and private mortgage insurance, providing a smoother entry into Alberta’s competitive real estate market.
Eligibility Requirements
To participate in the HBP, you must meet specific criteria established by the CRA. The key requirements include:
- You must be considered a first-time homebuyer (you or your spouse/common-law partner have not owned a home within the previous four years).
- You must have a written agreement to buy or build a qualifying home in Canada.
- You must intend to occupy the property as your principal residence within one year of purchase or construction.
- Your RRSP withdrawal must occur within the same calendar year as the purchase.
How the HBP Works
Once you’ve verified your eligibility, the process for using the HBP is relatively straightforward:
- Complete the T1036 Home Buyers’ Plan request form and submit it to your RRSP issuer (your bank, credit union, or financial adviser).
- Withdraw the desired funds from one or more RRSP accounts, ensuring they have been in your RRSP for at least 90 days.
- Use the funds toward your home’s down payment or closing costs.
- Begin repayment to your RRSP within two years after withdrawing the amount. The full repayment must be completed within 15 years.
Repayment Details
Each year, the CRA outlines the minimum annual repayment amount on your Notice of Assessment. You can contribute more than the minimum, but if you skip a required repayment, the missed amount will be added to your taxable income for that year. Staying on top of repayments ensures your RRSP continues to grow as a key component of your long-term financial health.
Benefits of the HBP for Edmonton and Area Buyers
Real estate professionals in Alberta, including REALTORS® with the REALTORS® Association of Edmonton and the Canadian Real Estate Association (CREA), recognize the HBP as a valuable strategy for clients looking to enter the housing market. Some notable advantages include:
- Reduced need for mortgage insurance if your down payment exceeds 20%.
- Lower borrowing costs due to smaller mortgage amounts.
- Greater flexibility to buy in desirable communities such as St. Albert or Sturgeon County.
- An opportunity to access growing real estate markets without depleting other savings.
Considerations Before Using the HBP
While the HBP offers many advantages, it’s not the right fit for everyone. Consider the following before making a decision:
- Withdrawing funds reduces your RRSP balance, which may impact your retirement savings growth.
- If you don’t make the required repayments, you’ll face increased taxable income.
- Market conditions and interest rates in Alberta can affect your purchasing power and long-term costs.
Final Thoughts
The Home Buyers’ Plan is a strategic way to make your dream of homeownership a reality in Edmonton, St. Albert, and surrounding Alberta communities. Before proceeding, it’s essential to consult a licensed REALTOR® familiar with local markets and a financial adviser to ensure the HBP aligns with your personal financial goals. With professional guidance, your RRSP can become a key stepping stone toward owning a home in one of Alberta’s most promising real estate regions.
For more details, visit the official Canada Revenue Agency Home Buyers’ Plan page or speak with a REALTOR® affiliated with the Canadian Real Estate Association (CREA).
