To help with the down payment and costs associated with the purchase of a first home, the Home Buyers' Plan (HBP) allows first-time home buyers to withdraw up to $25,000 from their Registered Retirement Savings Plan (RRSP) to purchase or build a home, without having to pay tax on the withdrawal.
Unlike regular RRSP withdrawals, HBP withdrawals are not added to a person's income when withdrawn. Instead, the HBP withdrawals must be repaid over a 15-year period or included in the individual's income if not repaid.
The HBP maximum withdrawal amount—currently $25,000—has not been adjusted for 10 years.
To provide first-time home buyers with greater access to their RRSP savings to purchase or build a home, Budget 2019 proposes to increase the Home Buyers' Plan withdrawal limit to $35,000. This would be available for withdrawals made after March 19, 2019.
For Canadians who have experienced a breakdown in their marriage or common-law partnership, it can be difficult to keep the family home under new and more challenging financial circumstances.
To help Canadians facing this challenging life event maintain home ownership, Budget 2019 also proposes that individuals that experience the breakdown of a marriage or common-law partnership be permitted to participate in the Home Buyers' Plan, even if they do not meet the first-time home buyer requirement. This measure would be available for withdrawals made after 2019.
Increasing the HBP withdrawal limit to $35,000 and extending access to individuals who experience the breakdown of a marriage or common-law partnership is estimated to reduce federal revenues by $145 million over five years, starting in 2019–20.