First Time Home Buyers Plan

As a first time home buyer in Canada you have the opportunity to buy your first home using your registered retirement savings plan (RRSP)  under the first time home buyers plan.  There are some very specific guidelines for this program that first time home buyers should be clear about before buying a home.



The first time home buyers plan allows a home buyer to use up to $25,000 of their RRSP funds (in their personal name for at least 90 days) towards the purchase of a home.  The funds must be repaid to their RRSP account within 15 years of the withdrawal.  You must be a Canadian resident and the home your principal residence.

It is important to know if you qualify under the first time home buyers plan and especially important if you can be denied access due to one missing requirement.  We hear this from lawyers that people think they qualify and don’t which can cause an issue at funding.  If you think you can use RRSP funds for down payment under the first time home buyers plan and then you are not eligible you must find the money elsewhere in order to complete on the purchase.  So I recommend you do your homework on your own and consult a professional —your mortgage broker and your lawyer to be sure.

The main guidelines for the first time home buyers plan are included on the following link

Pay special attention to the following key points

You are not considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the date of withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence.

This is an important point if you live with someone but you are not the owner of the home if the relationship ends and you move out and want to buy your own home you may not be eligible under the first time home buyers plan to use RRSP for your down payment.

If a home owner sells their home and then rents for more than 5 years (date specific as per first time home buyers plan website) you can use your RRSP funds for a down payment on a future home.

You can not use RRSP funds on a future home purchase if you have not repaid the full amount to the RRSP account on a previous use of the first time home buyers plan.

Some of these points can be missed and create a problem for some buyers.  Always be sure you are clear on the first time home buyers plan guidelines as you apply for financing and before you make an offer to purchase.

To review your specific situation call Pauline at 604 813 8402 or email