What’s New with the Home Buyers’ Plan (HBP)
In the Spring Economic Update 2026, the Government of Canada introduced an extended grace period under the Home Buyers’ Plan (HBP). For those making their first RRSP withdrawal between January 1, 2026 and December 31, 2028, the repayment period before starting repayment is now five years instead of the usual two. (budget.canada.ca)
Who Qualifies
You’re eligible if:
- You make your first withdrawal from an RRSP under the HBP between Jan 1, 2026 and Dec 31, 2028. (budget.canada.ca)
- You haven’t made a first withdrawal in a previous period that qualified under an earlier grace period.
Benefits & Strategy
- Allows greater cash flow relief: you don’t need to start your repayments until the fifth year after the year of withdrawal. So, if you withdraw in 2026, repayments begin in 2031. (canada.ca)
- This gives you extra breathing room when first buying a home—use the funds to stabilize finances, cover renovation costs, or support moving expenses without worrying about immediate RRSP repayment.
Practical Example
Jessica withdraws $60,000 from her RRSP under HBP on June 15, 2026 (her first withdrawal). Normally, repayments start in 2028. With the new policy, she begins repayment in 2031, giving her five years post-withdrawal year to delay repayment. During 2026-2030, she makes no repayments, enabling her to focus budget on purchase and move-in costs.
Action Steps
- Plan withdrawal timing if possible – withdrawing within 2026-2028 ensures eligibility for extended grace period. Withdrawing in 2029 loses that benefit.
- Ensure you’ll be able to begin repayment five years after the withdrawal year.
- Track the due dates – annually repayment begins in the fifth year after the year of first RRSP withdrawal in the qualifying period.
- Keep clear RRSP documentation and communicate with CRA in case of uncertainties around withdrawal eligibility.
Caveats & Watch Outs
- Grace period only applies to first HBP withdrawal in that date range.
- The RRSP withdrawal limit under HBP remains $60,000. (canada.ca)
- Failure to make required repayments once the grace period ends can result in missed deductions or income inclusion.
Summary
If you're a first-time home buyer withdrawing RRSP funds for a home in 2026, 2027, or 2028, this extended grace period provides a meaningful planning window. Use it wisely to align your finances, manage spending, and reduce stress during what can be a high-expense period.