What is the Home Buyers’ Plan (HBP)?
Want to use your RRSP to buy a house? What is the Home Buyers’ Plan (HBP) — and how can it put $35,000 in your pocket for a Georgetown purchase?
Quick answer: What is the Home Buyers’ Plan (HBP)?
The Home Buyers’ Plan (HBP) is a Canadian program that lets eligible first‑time home buyers withdraw up to $35,000 from their RRSPs tax‑free to buy or build a qualifying home. You repay it over 15 years, interest‑free, by putting annual amounts back into your RRSP. Use it for a primary residence in Canada, including Georgetown, Ontario.
Why the HBP matters in Georgetown, ON — fast
- It converts retirement savings into a down payment without immediate tax hit.
- It raises buying power for first‑time buyers competing in Georgetown’s tight market.
- More qualified first‑time buyers means faster sales and better prices for sellers.
If you sell a home in Georgetown, understanding the HBP helps you price, market, and close faster. If you help buyers use it, you unlock more offers.
Who qualifies as a first‑time home buyer? (The key eligibility rules)
- You’re considered a first‑time buyer if you — and your spouse/common‑law partner — didn’t own or occupy a home in the four years before the HBP withdrawal.
- You must intend to occupy the home as your principal place of residence within a year of buying or building it.
- The home can be for you, or for a related person with a disability.
Exceptions exist (for example, survivors or those purchasing for a related person). If in doubt, ask an accountant or contact CRA, but below I give the practical steps I use with clients in Georgetown.
How much can you withdraw? The numbers that decide deals
- Maximum per person: $35,000 from RRSPs.
- If two first‑time buyers buy together (spouses or partners), they can withdraw up to $70,000 combined.
- Withdrawals are tax‑free at the time of withdrawal when used under HBP rules.
Use these funds to increase your down payment. Bigger down payments improve mortgage terms and speed up approvals — critical in Georgetown’s competitive listings.
Step‑by‑step: How to use the HBP (what I walk every Georgetown buyer through)
- Confirm eligibility. Check your ownership history and HBP status.
- Make RRSP contributions early. Contributions must be in the plan for at least 90 days before you withdraw to qualify reliably.
- Fill out CRA form T1036 (Home Buyers’ Plan (HBP) Request to Withdraw Funds from an RRSP).
- Withdraw up to $35,000 (per qualifying participant).
- Buy or build your qualifying home and sign closing documents.
- Start repaying — you have 15 years. Each year you must repay 1/15 of the amount withdrawn. If you don’t, the required repayment for that year counts as taxable income.
I coordinate this process with mortgage brokers and lawyers to avoid timing and tax traps that could derail a deal.
Repayment: What you must know (and why it’s simple)
- You have 15 years to repay the full amount.
- The first repayment is due in the second year after the year you make the withdrawal. For example, if you withdrew in 2025, your first required repayment is on your 2027 tax return.
- Each year you must repay at least 1/15 of the total. You can repay more.
- Repay by contributing to your RRSP and designating the contribution as an HBP repayment on your tax return.
- Missed repayments are added to your taxable income, increasing your tax bill.
Repayment is straightforward if you plan. I build a repayment schedule for clients so it’s never a surprise.
Common HBP pitfalls I protect Georgetown buyers from
- Withdrawing contributions made less than 90 days earlier. That can complicate eligibility and trigger income inclusion.
- Assuming the mortgage lender doesn’t care about the source of down payment. Lenders verify funds; documentation matters.
- Forgetting the repayment schedule. A missed repayment means extra tax.
- Using the HBP without coordinating with closing dates — timing can cause cash shortfalls.
I handle these details so buyers don’t lose a home offer over paperwork.
How HBP affects mortgage approval in Georgetown
Lenders want to know you have stable income and can repay both your mortgage and the HBP repayments. Using the HBP can improve debt‑to‑income ratios (larger down payment reduces mortgage size), but lenders will still verify assets and income. I work with mortgage brokers who understand HBP rules and weave the RRSP withdrawal into the approval strategy.
Why sellers in Georgetown should care about the HBP
- More qualified buyers: HBP makes more buyers reach down payment thresholds.
- Faster closings: Buyers with HBP funds ready can close faster than buyers waiting to save.
- Better offers: A bigger down payment reduces financing conditions and risk.
Marketing tip for sellers and listing agents: advertise “HBP welcomed — RRSP withdrawal OK” and ensure your listing package helps buyers and their advisors see a clean path to close. That draws serious first‑time buyers.
Local market context: Georgetown, ON — why HBP use matters now
Georgetown’s market moves fast. Inventory is often limited, and first‑time buyers compete with move‑up buyers and investors. HBP is a practical tool to level the playing field for local buyers who have built RRSP savings. Using this program responsibly translates into more cash at closing, stronger offers, and fewer financing failures — all of which support higher sale prices and smoother transactions.
Real example (anonymized) — how HBP won a Georgetown deal
A couple came to me with $25,000 saved and $20,000 in an RRSP. We confirmed eligibility, contributed early contributions 90+ days before withdrawal, and used $20,000 via HBP to reach a 20% down payment. Lender approved, closing happened on schedule, seller accepted their offer over higher but conditional offers. Result: buyer secured home, seller closed quickly, no financing hiccups.
This is the exact playbook I use for first‑time buyers in Georgetown.
Should you use the HBP? Practical decision rules
Use HBP if:
- You’re an eligible first‑time buyer and want to increase your down payment now.
- You can repay the HBP over 15 years without compromising retirement plans.
- Your lender accepts the withdrawal and your lawyer confirms closing timing.
Don’t use HBP if:
- The withdrawal will leave you short in retirement and you can wait to save more.
- You can’t meet the 90‑day contribution rule.
- Your cash flow won’t support the HBP repayment and mortgage simultaneously.
I help clients run the numbers so the choice is clear and safe.
How I help buyers and sellers with HBP in Georgetown
- I pre‑qualify buyers for HBP status before making offers.
- I coordinate with mortgage brokers to present airtight financing packages.
- I brief sellers so they understand the strength of HBP‑assisted offers.
- I bring lawyers and accountants into the loop at the right time to avoid tax or timing mistakes.
If you want a fast, confident sale or a stronger offer as a buyer, this is the playbook.
FAQ — Home Buyers’ Plan and First‑Time Buyer Programs in Georgetown, ON
1) Can I use HBP for any property in Georgetown?
Yes, if it’s a qualifying home and you intend to live there as your principal place of residence within one year of purchase. This includes detached homes, condos, and some new builds.
2) Can two partners both use HBP together?
Yes. Each eligible person can withdraw up to $35,000. Together, that’s up to $70,000 in down payment funds.
3) What happens if I don’t repay the required HBP amount in a year?
The missed repayment amount is included in your taxable income for that year. You’ll pay tax on it.
4) Do I need to tell my lender I’m using HBP?
Always. Lenders require documentation. I work with brokers who know exactly what lenders want to see.
5) How does using HBP affect sellers?
Positive: buyers with HBP funds have larger down payments and fewer financing conditions. Sellers get stronger offers and cleaner closings.
6) Is HBP the same as first‑time buyer rebates or tax credits?
No. HBP is an RRSP withdrawal program. Other programs (like provincial rebates or the federal First‑Time Home Buyer Incentive, the GST/HST new housing rebates) are separate and can sometimes be combined. I’ll coordinate them for maximum benefit.
7) Can I use HBP if I’m buying a new build in Georgetown?
Yes, but timing matters. You must be sure to meet the occupancy intention requirements and timing for withdrawals. I coordinate with lawyers and builders so funds line up with closing.
8) Will using HBP hurt my mortgage rate?
Not directly. A larger down payment often helps you secure a better rate. The key is documentation: lenders need to confirm funds are legitimate and properly withdrawn under HBP rules.
9) Who should I talk to about tax implications?
Talk to your accountant for personalized advice. I also work with local tax pros who understand HBP and Georgetown transactions.
10) How can sellers advertise to attract HBP buyers?
Highlight affordability and HBP friendliness in your listing. Include financing notes in the marketing package and allow flexible closing dates to accommodate RRSP withdrawal timing.
If you’re buying or selling in Georgetown and want a clear HBP plan that closes deals, get a consultation. I’ll map the withdrawal, coordinate lender and lawyer timelines, and present your offer in a way sellers or buyers respect.
Contact: Tony Sousa, Local Georgetown Realtor
Email: tony@sousasells.ca
Phone: 416‑477‑2620
Website: https://www.sousasells.ca
Ready to turn RRSP savings into a home in Georgetown? Let’s talk — I make HBP work cleanly and fast.
