HBR Withdrawal Limits and Repayment Periods Increased

In the market for a new home? The Home Buyers Plan (HBP), which lets first-time buyers withdraw RRSP funds on a tax deferred basis to buy a home, became a key part of the government’s effort to make homeownership more accessible. Bill C‑30 has recently put several of these proposed changes into law, something taxpayers and their advisors should be discussing this month as tax seasons 2026 winds to a close. Here are the key talking points:

The Changes: One of the key recent changes to discuss is the higher HBP withdrawal limit, reflecting rising home prices. The cap increases from $35,000 to $60,000, and couples can now withdraw up to $120,000 combined. This can strengthen a down payment and reduce the need for insured mortgage financing. Together with the TFSA limit of $40,000, a could can save on a tax assisted basis, $200,000 for a new home down payment.  

But the more recent key change is a longer repayment grace period. Normally, HBP repayments begin within two years after a home purchase, but for first withdrawals made from January 1, 2022, to December 31, 2025, the start of the 15-year repayment period was delayed by three additional years. As a result, repayment begins in the fifth year after the first withdrawal—for example, a 2022 withdrawal would start repayment in 2027.

The Spring Economic Update of April 28, 2026 proposed to extend this five-year grace period so that it also applies to participants making a first withdrawal up to December 31, 2028.

Bottom Line: In a volatile housing market with rising costs, the enhanced Home Buyers’ Plan and repayment plan offers some stability. While it will not resolve the affordability crisis, it gives prospective homeowners a clearer and more achievable path to ownership. Buyers should still consult a financial planner and accountant to confirm eligibility and ensure tax compliance.