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Your RRSP has a secret door ($60,000, tax-free)

You can pull up to $60,000 out of your RRSP for your first home. A couple can pull up to $120,000.

3 min read

Most people believe RRSP money is locked away until retirement. If you touch it early, you get taxed hard. That is true — most of the time.

But your RRSP has a secret door. It is called the Home Buyers' Plan. And it lets you pull out real money for your first home. Tax-free.

The myth

My RRSP is locked until I retire. I can't use it for a house.

The truth

Up to $60,000 can come out tax-free for your first home. A couple can pull up to $120,000.

The Home Buyers' Plan, in plain words

The Home Buyers' Plan (HBP) is a program from the Canadian government. It lets first-time buyers borrow from their own RRSP to buy or build a first home.

  • You can take out up to $60,000 from your RRSP.
  • If you buy with a partner, and both of you qualify, each of you can take $60,000. That is $120,000 total.
  • You pay no tax on the withdrawal. It is not income. It is a loan from yourself.

It stacks with the FHSA

This is the part almost nobody knows. You can use both accounts for the same purchase. Same home. Both accounts. Both people.

A couple stacking both accounts (lifetime maximums)
  • Partner 1 — FHSA$40,000
  • Partner 2 — FHSA$40,000
  • Partner 1 — RRSP (HBP)$60,000
  • Partner 2 — RRSP (HBP)$60,000
Total tax-advantaged room$200,000

Illustrative maximums. You need to have contributed the money first — the room is the ceiling, not what you already have.

The catch nobody mentions: you have to pay it back

The FHSA is tax-free forever. The HBP is different. It is a loan from your future self. You have to put the money back into your RRSP over 15 years.

The Canada Revenue Agency (CRA) tells you the minimum you owe each year — about 1/15 of what you took out. If you miss a year, that year's payment gets added to your income and gets taxed. That can hurt.

The 15-year repayment window
  1. Year 1
    Repayment starts (2nd tax year after withdrawal)
  2. Year 5
    About 1/3 paid back
  3. Year 10
    About 2/3 paid back
  4. Miss a year
    That amount becomes taxable income

Which one first?

Short version:

  • Fill the FHSA first. Tax-free forever, no repayment.
  • Then use the HBP if you need more.
  • If your workplace matches RRSP contributions — take the match. That is free money. Always.

This is general education, not personalized financial or tax advice. Rules and limits can change. Talk to a licensed advisor about your own situation.

This is general education, not personalized financial or investment advice. Talk to a licensed advisor about your own situation.