First Time Home Buyer’s Plan

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


first time home buyers planThe first time home buyers plan permits you to use up to $25,000 of your RRSP savings towards the purchase of a home. You must be a Canadian resident and you must be buying the home for your primary residence. The funds must be in your personal name and in your registered account for at least 90 days. You must  also repay these funds to your RRSP account within 15 years of the withdrawal.

There are many qualification requirements and it is therefore important to know if you qualify under the first time home buyers plan.

We often hear from lawyers that people thinking they qualify for the first time home buyer’s plan are in for a rude awakening when they find out that they don’t and it can cause a last minute issue and delay completion of your purchase. You must find the money elsewhere in order to complete on the purchase if it turns out that you are not eligible for the first time home buyer plan so it is crucial that you not only do your homework on your own but consult a professional —your mortgage broker and your lawyer to be sure. Aside note, it is important that you let your mortgage broker know, even the tiniest details or changes that occur to your position or plans, as it can impact your mortgage.

You can find the main guidelines for the first time home buyer’s plan on the  following government link

The following key points are important and require special attention

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 lived with someone, be it a spouse or common law partner, who owned the home. Even if the relationship ended and you moved out and now 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 you were a home owner and sold your home and then rented 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.

Although the program is called “first time home buyers plan”, as we just discussed, you are able to take advantage of the program more than once, provided that you have repaid the full amount to the RRSP account on a previous use of the first time home buyers plan, and that you of course meet the other requirements.

There are so many stipulations and some of these points can be easily missed and can create a problem for home 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, or if you have any questions or concerns, call us at 778 233 2377 or email us at