The Home Buyers’ Plan (HBP)

The Home Buyers’ Plan (HBP) offers help to those striving for homeownership, enabling tax-free withdrawals from Registered Retirement Savings Plans (RRSPs) to fund a down payment. The borrowed amount must still be repaid within 15 years to maintain its tax-exempt status.

In response to the nationwide housing challenges, the 2024 budget introduces reforms geared towards facilitating first-time home ownership. These changes include:

1. Increased Withdrawal Limits: Canadians may now withdraw up to $60,000 from their RRSPs, a substantial increase from the previous cap of $35,000. For couples, the limit is doubled to $120,000.
   
   
2. Extended Repayment Grace Period: The repayment window for HBP withdrawals is traditionally 15 years, with annual repayments of at least 1/15 of the borrowed amount.

   
   The budget proposes an additional three-year deferral before repayment commences.  This extension applies to withdrawals made between January 1, 2022, and December 31, 2025, granting a five-year grace period before repayment rather than the previous timeline of two years.
   
3. Beyond changes to the HBP, the budget introduces 30-year mortgage amortizations for first-time buyers of newly constructed homes, effective August 1, 2024. Insured mortgages with 30-year amortization aim to alleviate the burden of higher monthly mortgage payments for more Canadians.
   

 

For prospective first-time homebuyers, navigating the path to homeownership entails overcoming formidable financial hurdles, notably the accumulation of a sizable down payment. Recognizing the evolving landscape of real estate affordability, the HBP enhancements acknowledge the contemporary challenges of saving sufficient funds.

The newly proposed withdrawal limits and extended repayment timelines hope to offer a more feasible route to realizing homeownership aspirations.


While these changes apply to withdrawals initiated after April 16, 2024, individuals should verify the implementation of increased limits with their financial institutions when planning their withdrawals.

Business Owners

The most overlooked area of financial planning for business owners and incorporated professionals is the lack of integration between corporate and personal assets. When the majority of your assets are in your corporation you need very specific, specialized and personalized financial advice.

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