Buying your first home in Ottawa is a major goal for many newcomers, and Canada has a program specifically designed to help you get there using your RRSP savings. It's called the Home Buyers' Plan, and it's one of the most practical perks of having an RRSP.
What Is the Home Buyers' Plan?
The Home Buyers' Plan (HBP) lets you withdraw up to $60,000 from your RRSP to use toward buying or building a qualifying first home, without paying tax on the withdrawal at the time.
If you and your spouse are both first-time buyers, you can each withdraw $60,000 for a combined $120,000 toward your down payment.
Who Qualifies?
To use the HBP, you must:
- Be a first-time home buyer (you haven't owned a home in the past four years that you lived in as your principal residence)
- Have a written agreement to buy or build a qualifying home
- Intend to live in the home as your principal residence within one year of buying
- Have the RRSP funds in your account for at least 90 days before withdrawing
That last point is key. You can't deposit money on Monday and withdraw it on Friday. Plan ahead.
How Repayment Works
The withdrawal isn't free money. It's an interest-free loan from your future self. You have 15 years to repay it back into your RRSP. Repayments start two years after the year of withdrawal.
Each year, 1/15th of the amount becomes due. If you don't repay in a given year, that amount is added to your income and you pay tax on it.
So if you withdrew $45,000, you'd repay $3,000/year for 15 years. Miss a year? That $3,000 becomes taxable income.
Is the Ottawa Housing Market Worth It?
Absolutely. Ottawa's average home price hovers around $600,000–$700,000. Coming up with a 5–20% down payment is genuinely challenging for many newcomers. The HBP gives you a head start by letting your RRSP savings, already growing tax-free, do double duty.
Some Ottawa newcomers pair the HBP with the First Home Savings Account (FHSA), another newer program that also lets you save tax-free for a first home. Using both together can supercharge your down payment fund.
Practical Steps
- Open an RRSP and start contributing (if you haven't already)
- Ensure funds sit in the RRSP for 90+ days
- Complete CRA Form T1036 when you're ready to withdraw
- Use the funds toward your down payment
- Set up annual RRSP repayments starting in year two
If you're actively saving for a home in Ottawa, the HBP is a strategy worth building your RRSP around from day one.
