Tax Planning
Nest Egg Strategy: Using the Home Buyers’ Plan to Buy Smart
Maximize your RRSP for a home purchase—without hefty penalties. Understand recent proposals and how to plan your HBP withdrawal and repayment strategically.
By NomadicTax Research Team • 5-8 min read • August 30, 2026
## What is the Home Buyers’ Plan (HBP)?
The HBP allows eligible individuals to withdraw up to **$60,000** from their RRSP to buy or build a first home (or for a specified disabled person home). Purchases made jointly allow each partner to withdraw their own $60,000. *Key point*: the withdrawal must be repaid over a **15-year period**, starting in the second year after the first withdrawal.([budget.canada.ca](https://www.budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
## Recent Changes You Should Know
Because of Cost Pressures and to Aid First-Time Buyers, the **Government of Canada** has proposed changes under the Spring Economic Update 2026:
- The **grace period** (before you must begin repayments) was temporarily increased—from 2 years to **5 years**—for those whose first HBP withdrawal occurred between **January 1, 2022 and December 31, 2025.**([budget.canada.ca](https://www.budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
- The proposal is to **extend the 5-year grace period** to be available for first withdrawals up to **the end of 2028**, meaning those making their first withdrawals through **December 31, 2028** can wait 5 years before starting repayments.([budget.canada.ca](https://www.budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
## Real-World Examples
| Scenario | Before Change | After Change (Proposed) |
|---|---|---|
| First withdrawal in **2024** | Repayments begin in 2026 (year 2 after withdrawal) | Can delay until 2029 because grace period extended to 5 years |
| First withdrawal in **2026** | Repayments begin 2028 | Still can delay until 2031 under extended grace period |
| First withdrawal in **2029** | Not eligible for extended grace period; 2-year grace applies | Same as before (2-year grace) |
## Actionable Insights: How to Plan Smart
- If you're considering first using the HBP, **strive to make your first withdrawal by December 31, 2028** to get the extended grace period benefit.
- Use those extra years to build savings or align with other cash flows, e.g. pay down debt before the repayment schedule begins.
- Keep accurate records of when the first withdrawal is made—CRA form annotations or RRSP statements will need to show your eligibility date.
- Remember that if you don’t repay as required, **the outstanding amount becomes taxable income** for the year repayment was missed.
## Considerations before Opting In
- Suspending repayment for 5 years means **less RRSP room for future years**, plus delayed tax relief from RRSP deductions.
- During the grace period, you’re missing out on potential investment growth if the funds remained in RRSP.
- Ensure that delaying repayment doesn’t clash with other financial goals like retirement or travel.
## Summary
The Home Buyers’ Plan remains a powerful RRSP-based strategy for first-time purchasers. Thanks to recent proposals, eligible first‐time buyers can gain an extended **5-year grace period** if their first withdrawal is made by end of 2028. Plan accordingly—this window is limited. Use it to maximize benefit without disrupting long-term financial priorities.