How Much Can We Take from our RRSPs for Our House? How the Home Buyers Plan Numbers Work

Buying a first home can be very stressful. Most of us will need to find as much money as we can to make a good down payment. A common source of down payments in Canada is withdrawals from personal Registered Retirement Savings Plans under a program called the Home Buyers Plan. It’s not always clear exactly how much you can withdraw. Here are the rules.

No RRSP, No Luck


If you don’t have any money in your RRSP, you can’t get any money out of it when you purchase your home.

Small RRSP, Small Down Payment

If you do have money in your RRSP and you have less than or exactly $25,000, and it’s been there for at least 3 months (90 days) before you want to use it to buy your home, you can take the whole amount out.

Whopping RRSP, Modest Down Payment

If you have more than $25,000 in your RRSP, and it’s been there for at least 3 months (90 days) before you want to use it to buy your home, you can only take out $25,000. Any additional withdrawals from your RRSP will be added to your income for the year and taxed at a your highest tax rate. You won’t be able to re-contribute those withdrawals above $25,000 in later years, either. And you will have to pay some of the income tax owing on the money before you can withdraw it not just by April 30.

Buying a First Home with a Spouse

Your spouse can also make a withdrawal following the same rules. So the most you two could withdraw as a combined total is $50,000.

You Can’t Share RRSP Room with a Spouse

If you have, say $30,000 in your RRSP and your spouse has $20,000 in his RRSP, the most that can be withdrawn is $55,000. You can’t withdraw more than $25,000 even if your partner is short of the maximum.

I Have 3 RRSPs. Can I Withdraw from All of Them?

Sometimes people have RRSPs at several financial institutions. They may have GICs at a trust company, Streetwise Funds at ING Direct, and stocks in a self-directed brokerage account.

You can withdraw your investments from any of your RRSP accounts. The total withdrawal is limited to $25,000 though and it must have been contributed more than 3 months (90 days) before the withdrawal.

Can the Bank Charge Me to Withdraw from my RRSP for the HBP?

Yes.

No tax has to be withheld on withdrawals from a RRSP for the Home Buyer’s Plan. However, a bank or financial institution can still charge you a fee to take out the money. Fees of $100 are not unusual.

If you are getting a mortgage from the bank that holds your RRSPs you may be able to ask to get the fee waived. They should want your mortgage business badly enough to give up the $100 or so fee.


Can I Withdraw Funds from a LIRA or a Group RRSP?

Usually you can NOT withdraw funds from

  • a locked-in retirement account (this is the kind of account you get when you leave a job and they give you some or all of your future retirement funds as a type of RRSP)
  • a group RRSP (these are usually a type of pension plan available through your job)

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Did you use the HBP to help with your down payment? Or are you hoping to? Please share your experiences with a comment.

4 thoughts on “How Much Can We Take from our RRSPs for Our House? How the Home Buyers Plan Numbers Work

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  3. Just to double check, paying back the HBP doesn’t have to be at the same institution right? Don’t need a T2033? Only need to fill in the correct boxes on the Tax return?

    [Have a RRSP at PC financial, earmarked for a down payment, but want to start investing the amount when re-payed. Thinking Questrade or RBC.]

    • You’re correct. You can make the “repayment” contribution anywhere just as if it was a new contribution. It’s only when you file your taxes that you identify it as a repayment instead of a new contribution. (You will get a regular tax receipt when you contribute. You will need it. It proves you “repaid” even though it won’t get you a tax refund.)

      You’re also correct, no transfer forms (T2033s) needed.

      If you aren’t sure exactly what you want to do with the money when you start re-paying, you can look for somewhere to “park” your contributions temporarily in an RRSP savings account. I use ING Direct because they do not charge anything to transfer the RRSP money later to a brokerage etc. (Always check though. Although they do not charge a fee for transfers out right now, that could change at any time.)

      Be sure to read up on brokerages before picking one. Among other places I’ve seen some interesting comments about Questrade on redflagdeals, http://forums.redflagdeals.com/personal-finance-f41/
      I’ve only used InvestorLine and Investors Edge so far. Both seem good, but you need $25,000 in the RRSP to avoid annual fees and 50,000 to get $10 trades. Personally I think an RRSP needs a strong base of fixed income investments, so I just bought GICs/bonds/savings accounts until I had the $25,000 and then moved it to a brokerage. I only bought shares/equity ETFs with money invested above the 25,000 mark.

      RBC has been offering a no-fee RRSP account provided you set up and keep up a monthly contribution plan. The fee to buy stocks or ETFs though is still high until you get 50,000 of assets. Again always confirm the fees before opening an account as they can change very quickly.

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