How to Use the Home Buyers’ Plan (HBP) Like a Pro, The $60K HBP Advantage

The Ultimate Guide to the $60,000 Home Buyers' Plan (HBP): How to Use It Like a Pro

If you’re a first-time home buyer in Calgary, or you’ve been out of the market for a while, there’s one financial tool you absolutely need to know about: the Home Buyers' Plan (HBP). With the recent increase to a $60,000 withdrawal limit, this program is a game changer. I’m breaking down exactly how it works, who qualifies, and how to use it strategically to buy your next home—without getting on CRA’s bad side.

Use our quick navigation guide below to jump to any point of our blog on How to Use the Home Buyers’ Plan (HBP) Like a Pro:  

• What Is the Home Buyers' Plan (HBP)?
  
• Who Can Use It? Let’s Talk Eligibility
  
• Smart Ways to Use the HBP (and Avoid Costly Mistakes)
  
• How Repayments Work
  
• Special Scenarios You Should Know About
  
• Stack the HBP with FHSA for Maximum Leverage
  
• First-Time Home Buyer GST Rebate: Don’t Leave Free Money on the Table
  
• Should You Use the HBP?
  
• Next-Level Strategy: Slash Years Off Your Mortgage
  

What Is the Home Buyers' Plan (HBP)?

The HBP lets you pull money out of your RRSP to help with your down payment—and you won’t pay tax on that money as long as you follow the rules. It’s basically an interest-free loan to yourself, and you have up to 15 years to pay it back.

You can use the HBP to buy a home for yourself or for a relative with a disability. And as of April 16, 2024, the limit jumped to $60,000 per person. That means couples can tap into up to $120,000 tax-free for their down payment.

Quick Tip: If you go over the $60,000 limit, that extra amount will be taxed like regular income—so don’t overdo it.

Who Can Use It? Let’s Talk Eligibility

To keep that withdrawal tax-free, you’ve got to meet a few criteria:

• First-Time Buyer: You (or your spouse/partner) can’t have owned a home you lived in during the past four years. There are exceptions if you’re buying for a disabled relative or if you’re separated from a partner.

• RRSP Contributions Must Be Seasoned: Any RRSP contributions must sit in the account for at least 90 days before withdrawal.

• You Need to Complete Form T1036: This is your official request to pull money out under the HBP. Do it before making any withdrawals.

• Home Purchase Deadline: You must buy or build your new home by October 1st of the year after you first withdraw the funds.

• You Must Live There: You (or the relative with a disability) must move in within a year of purchase.

Smart Ways to Use the HBP (and Avoid Costly Mistakes)

Here’s where it gets interesting. You can use the HBP in a way that actually boosts your liquidity and saves you money.

1. 90-Day Contribution Strategy

Got savings lying around? Contribute to your RRSP, wait 90 days, then pull it out under the HBP. You’ll get a juicy tax refund AND use the money for your down payment.

2. Don’t Get Burned by the 89-Day Rule

If you contribute to your RRSP within 89 days of withdrawal, that contribution might not be tax deductible. Be careful here—it’s a common mistake that could cost you.

3. Stack It With FHSA for Maximum Impact

Yes, you can combine the HBP with your First Home Savings Account (FHSA). That’s up to $60K from your RRSP and another $40K from your FHSA. No tax, no repayment on the FHSA. This combo is powerful.

4. Weigh the Opportunity Cost

Pulling money out of your RRSP means losing out on its tax-sheltered growth. But if it helps you hit a 20% down payment and skip default insurance, it might be worth it. Every situation is different.

5. Consider an RRSP Loan to Max Out

Short on savings? Use an RRSP loan to contribute up to the $60K limit, then withdraw under the HBP. Just remember—the loan comes due right away.

How Repayments Work

Once you use the HBP, you have to start paying it back—one-fifteenth (1/15) per year over 15 years.

• Temporary Grace Period: If you withdrew between 2022 and 2025, your repayment clock doesn’t start until the fifth year.

• Track It: The CRA will keep you posted each year via your Notice of Assessment or through My Account.

• How to Repay: Contribute to your RRSP and designate it as an HBP repayment on your tax return. These repayments aren’t tax deductible.

• Miss a Payment? That year’s repayment amount gets added to your taxable income. So yeah, don’t miss it.

Special Scenarios You Should Know About

Life happens. Here’s what to expect if your situation changes:

• You Pass Away: Normally, the balance is added to your final tax return. But your spouse can take over the repayment if they file the right form.

• You Turn 71: You can’t contribute to an RRSP past December 31 of the year you turn 71. So you’ll either repay in full or declare the balance as income.

• You Leave Canada: If you become a non-resident before you buy the home, you might have to cancel the HBP. If it happens after you move in, you’ll have to repay or include the balance as income.

Stack the HBP with FHSA for Maximum Leverage

If you really want to supercharge your down payment, the Home Buyers’ Plan (HBP) can be paired with the First Home Savings Account (FHSA) — and together, they’re an unbeatable combo.

Here’s how it works:

You can withdraw up to $60,000 from your RRSP under the HBP and another $40,000 from your FHSA, completely tax-free. The FHSA portion doesn’t need to be repaid, unlike the HBP, which gives you 15 years to pay yourself back.

This means a couple could access as much as $200,000 toward a first home purchase without paying a cent in tax — $120K from their RRSPs via the HBP and $80K from their FHSAs. Canada’s First Home Savings Account (FHSA): What You Need to Know

First-Time Home Buyer GST Rebate: Don’t Leave Free Money on the Table

Here’s a bonus perk that too many first-time buyers should look into — the GST Rebate.

If you’re buying a newly built or substantially renovated home, you may be eligible for a partial refund of the 5% GST you paid on the purchase price. This can mean thousands of dollars back in your pocket — money that can help with furniture, upgrades, or simply reducing your initial costs.

The rebate amount depends on the home’s price and whether it’s your primary residence, but it’s well worth checking. Combine it with your HBP and FHSA strategy, and you’ve got a trifecta of savings most buyers never fully tap into.

For a full breakdown of eligibility, thresholds, and how to apply, check out our in-depth guide: First-Time Home Buyer GST Rebate: What You Need to Know

Should You Use the HBP?

If you’re buying in Calgary and want to boost your down payment without paying extra tax, the HBP is a smart move—as long as you follow the rules. With the new $60,000 limit, there’s never been a better time to take advantage.

Next-Level Strategy: Slash Years Off Your Mortgage

Want to Learn a Mortgage Hack to Help You Pay It Off Faster?

Using the Home Buyers’ Plan is a smart way to get into your first home — but what if you could also pay that mortgage off years sooner and save thousands in interest along the way?

Once you’ve used the HBP to boost your down payment and reduce your mortgage amount, the next step is learning how to structure your mortgage payments for maximum savings. Even small changes — like switching to accelerated bi-weekly payments or putting your tax refund toward the principal — can shave years off your loan and save you tens of thousands over time.

This quick video breaks down one of the most effective strategies to reduce interest and speed up your path to full homeownership:

When you pair smart down payment strategies like the HBP with a strong mortgage payoff plan, you’re not just buying a home — you’re setting yourself up for financial freedom years ahead of schedule.

Smart Money Moves Start Before You Buy

The new $60,000 Home Buyers’ Plan isn’t just another incentive—it’s a serious tool when used strategically. Over the years, I’ve helped first-time buyers use programs like the HBP, FHSA, and RRSP stacking to buy smarter, not harder. My approach blends financial strategy with real estate execution—because saving tax and equity starts long before you get the keys.

If you’re ready to explore how to leverage your RRSPs or other savings programs into real property wealth, let’s talk strategy and build a plan that fits your life and your long-term goals.

Dusko Sremac – Calgary & Area REALTOR® | Team Lead, REPYYC

Cell: 403-988-0033   |   Email: dusko@repyyc.com

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