skip to Main Content
RRSP Withdrawal Limit Upped For First-time Buyers

RRSP Withdrawal Limit Upped for First-time Buyers

The federal government is increasing the amount first-time buyers can withdraw from their registered retirement savings plan (RRSP) contributions in an effort to make homeownership easier.

Canadians saving for a down payment on their first home, resale purchase or new build, will be able to take out $60,000, an increase of $25,000, once the Liberals’ budget is passed.

Amounts withdrawn are tax-free. Under existing Home Buyers’ Plan (HBP) rules, the monies must be repaid over a maximum of 15 years, starting in the second year after the withdrawal. So, if you make your first withdrawal in 2024, the first year of repayment will be 2026. However, the government has proposed that people who withdraw from the HBP  through Dec. 31, 2025, will have their repayment grace period extended to five years. If passed, this will be retroactive to Jan. 1, 2022.

The government says it increased the HBP withdrawal limit from $35,000 because the down payment amount and time needed to save up for a down payment are much larger today.

Another budget announcement included lengthening the amortization period on insured mortgages to 30 years for first-time homebuyers. However, this rule only applies to purchases of newly built homes.