Tax Planning
Tax Planning for Canadian Homebuyers: Making the Most of the Home Buyers' Plan Changes
Understanding the proposed changes to the Home Buyers' Plan can help first-time buyers leverage RRSP withdrawals while navigating future repayment timelines and tax implications.
By NomadicTax Research Team • 6 min read • June 3, 2026
## What Is the Home Buyers' Plan (HBP)?
The **Home Buyers' Plan (HBP)** allows eligible individuals to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to buy or build a first home or a home for a person with a disability. Withdrawn amounts must be repaid over a **15-year period**, beginning in the second year after withdrawal. ([budget.canada.ca](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
## What's New in the 2026 Spring Economic Update?
The government’s **Spring Economic Update 2026**, released in April, included a proposal to modify certain taxation measures, including those affecting the HBP. While no immediate change to the $60,000 withdrawal limit or the repayment period was announced, the Update confirms that the HBP’s existing rules will continue under consideration. Stakeholders should monitor for legislative proposals that could affect eligibility or repayment thresholds. ([budget.canada.ca](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html?utm_source=openai))
## Tax Planning Strategies to Consider Now
Even before any changes are enacted, savvy homebuyers can plan to take advantage:
- **Maximize RRSP contributions before planned withdrawal**: Contributing the maximum allowable RRSP funds ahead of a purchase ensures you have sufficient savings and potentially reduces taxable income.
- **Time your purchase in relation to tax years**: If you plan to pull from RRSPs, aligning your use early in a taxation year may give more repayment flexibility.
- **Understand repayment obligations**: Repayment starts in year 2 and continues for 15 years—budget accordingly to avoid surprise taxes.
- **Keep documentation ready**: When legislation is tabled, ensure you have proof of eligibility (first-time buyer status or disability condition) to avoid delays.
## Practical Example
**Case**: Clara expects to purchase her first home in early 2027. She contributes to her RRSP every year, and has saved $50,000 by late 2026. If she withdraws $60,000 using the HBP in early 2027:
- She must begin repayments in 2028.
- She’ll have until 2042 to complete all repayments to avoid being taxed on unpaid amounts during those years.
- If changes are introduced after 2026, for instance, limiting contributions or adjusting eligibility, Clara’s planning before that window could be beneficial.
## Actionable Tips
- Review your RRSP contributions at year-end 2026 to ensure maximum catch-up.
- Engage with financial advisers to model different repayment scenarios under the 15-year schedule.
- Stay updated on draft legislative proposals, as finance committees may alter provisions affecting the HBP.
- For those with disabilities, keep certifications and medical documentation in order if disability qualifies under HBP terms.
**Bottom line**: The Home Buyers' Plan remains a powerful tool, but with the potential for rule adjustments, early planning can make a meaningful difference. Those expecting to use HBP in the next 12–24 months should act now—contribute, save, and stay informed of proposed changes.