Case Studies
Making Home Buyers’ Plan & Employee Ownership Trust Exemptions Permanent: What Individuals Should Know
Significant changes from the 2026 Spring Economic Update grant permanence to two key tax-assisted structures: home-buyers accessing RRSP funds and business owners transitioning to worker-co-op or trust models.
By NomadicTax Research Team • 5-8 min read • June 18, 2026
## Overview: Home Buyers’ Plan (HBP) & Employee Ownership Trust Tax Exemption
The Spring Economic Update 2026 confirms that the **Employee Ownership Trust exemption**, which allows individuals to be exempt from capital gains taxation on qualifying sales of businesses to employee-ownership trusts or worker cooperatives, will be made **permanent**. Previously temporary, it now offers long-term certainty for business owners. ([budget.canada.ca](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
Similarly, the **Home Buyers’ Plan**, allowing RRSP withdrawals up to $60,000 for your first home, had a temporary five-year grace period for repayment for those who made first withdrawals between 2022-2025. That grace period is now extended through **2028**. ([budget.canada.ca](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
## Who Benefits Most?
- **Entrepreneurs** looking to transition ownership to employees or cooperatives—previously unsure if tax benefits would endure.
- **First-time homebuyers**, especially those who withdrew from RRSP in 2022-2024, gain more room before starting repayments.
## What You Should Plan For
1. If you are selling your business to an employee ownership trust, ensure that your transaction meets qualifying conditions—note timing (after 2023) and structure. Permanence means you can make decisions with confidence. ([budget.canada.ca](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
2. If you used or plan to use the HBP, map out your repayment schedule: grace periods, repayment obligations start in the fifth year after withdrawal instead of second for certain withdrawals. Keep track of when your first withdrawal occurred. ([budget.canada.ca](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
## Example
Sarah withdraws $60,000 from her RRSP in 2023 under HBP. Under old rules, she’d start repayments in 2025. Under the extended grace, her repayments begin in **2028**, giving more breathing room.
Jacob owns a small tech firm and wants to sell to an employee ownership trust. Because this exemption is now **permanent**, he can plan the sale structure without worrying about sunset clauses. If the capital gains qualify up to $10 million in dispositions, the exemption could generate substantial savings. ([budget.canada.ca](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
## Caveats & Compliance Tips
- The Employee Ownership Trust rules have specific conditions (timing of sale, worker cooperative corporation status, trust structure). Consult specialist tax advisors.
- For HBP users: repaid withdrawals need tracking; missed repayments or defaulting on schedule trigger inclusion in income.
- Monitor CRA publications for forms and filing guidance reflecting the permanent status of these measures.
## Bottom Line
Two formerly temporary measures—Employee Ownership Trust exemption and extended HBP repayment grace—are now long-term fixtures. Individuals and business owners should update their tax-planning strategies accordingly to maximize benefits and manage timing risk.