Tax Planning
Using the Extended Home Buyers’ Plan Grace Period to Your Advantage
The Home Buyers’ Plan repayment grace period has just been extended under new legislation. Here’s how first-time homebuyers can use the extra breathing room wisely.
By NomadicTax Research Team • 5-8 min read • July 16, 2026
## What’s changed in the Home Buyers’ Plan (HBP)?
Under **Bill C-30**, which received Royal Assent on **June 19, 2026**, the government has **extended the grace period** for new HBP withdrawals made from RRSPs between **2026 and 2028**, moving the time when repayment must begin from **2 years** after withdrawal to **5 years**. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html?utm_source=openai))
## Who can benefit
- Individuals making a first home purchase or building a home who **withdraw funds from RRSPs** under the HBP during **2026-2028**.
- Must intend to qualify as an eligible home buyer under the RRSP withdrawal rules (first-time homebuyer or eligible for a disabled person’s home purchase).
## Practical uses of the extended grace period
- **Liquidity planning**: You can delay repayments over a longer period, freeing up cash for other pressing needs (e.g. renovations, moving expenses).
- **Staggered contributions**: Spread repayments gradually over 5 years rather than rushing within first 2 years—can smooth tax impact and RRSP contribution planning.
- **Tax bracket management**: Use delayed repayment in years when your income may be lower to minimize the tax impact of including required payments.
## What you must do to qualify
- Withdraw funds from RRSP between **2026-2028** under HBP.
- Your home completion date generally must fall within certain limits defined in the legislation; double-check whether your specific case is covered. ([civicsproject.org](https://www.civicsproject.org/regions/canada/bill/45/1/c-30?utm_source=openai))
## Examples
- You withdraw CA$60,000 from your RRSP in 2026, expecting to buy a home. Under old rules, you would begin repayment in 2028 (2-year grace). Under new rules, repayment can begin in **2029**, giving you 3 extra years of breathing room.
- For a couple purchasing jointly and each withdrawing from their RRSPs, both members benefit from the grace period extension.
## Watch-outs and considerations
- Interest/dividends and RRSP growth still matter: delaying repayment doesn’t mean skipping it—since HBP still requires full repayment over **15 years**.
- Tax events: the longer grace period may push required payments into years with higher tax rates; plan to avoid surprises.
- RRSP contribution room: ensure that delayed repayments are possible under RRSP rules and that unused contributions or deductions are optimized.
## Actionable advice for prospective homebuyers
1. Plan RRSP withdrawals early: decide if you’ll be making a withdrawal in 2026-2028 and consider timing relative to home purchase.
2. Map your repayment schedule: determine what fit best over 5 years, considering your income trajectory.
3. Budget accordingly: factor other home purchase costs (closing, maintenance) into the extra time.
4. Consult professional advice: ensure your specific province/territory doesn’t have additional rules, and your tax preparer understands the new grace period.