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Understanding Canada’s Homebuyers’ Plan and Registered Retirement Savings Plan (RRSP)

Introduction to the Homebuyers’ Plan (HBP)

Canada’s Homebuyers’ Plan (HBP) provides an excellent opportunity for Canadians to utilize their registered retirement savings plan (RRSP) funds for purchasing or building a home. As of April 2024, individuals can withdraw up to $60,000 from their RRSP under this plan. The repayment period spans 15 years, starting the second year after withdrawal, although earlier and larger repayments are encouraged to reduce the remaining balance.

What is a Registered Retirement Savings Plan (RRSP)?

A Registered Retirement Savings Plan (RRSP) is a retirement savings account that offers tax-deferred growth on the invested funds. This means the contributions and the earned interest are not taxed until they are withdrawn, typically during retirement when one’s income may be lower.

Types of RRSPs

  1. Self-Directed RRSP: This type of RRSP is registered in your name, allowing you to manage your investments and benefit directly from the tax advantages.

  2. Spousal RRSP: Designed for couples, this RRSP provides a tax deduction for the contributor while the account is registered in the spouse’s name, potentially resulting in tax benefits upon withdrawal.

  3. Locked-in RRSP: If you leave your employer before retirement, this RRSP allows you to manage your pension funds independently.

Utilizing RRSP Funds

RRSPs are versatile and can be used for more than just retirement savings. Funds from an RRSP can be invested in:

  • Stocks
  • Exchange-Traded Funds (ETFs)
  • Mutual Funds
  • Bonds
  • Guaranteed Investment Certificates (GICs)
  • Gold and Silver Certificates

Eligibility for an RRSP

There is no minimum age to start an RRSP, but there are certain conditions to meet. Individuals must close their RRSP by December 31 of the year they turn 71. To open an RRSP, one must have:

  • Employment income
  • A valid Social Insurance Number (SIN)
  • A history of filing tax returns


The Homebuyers’ Plan (HBP) and Registered Retirement Savings Plan (RRSP) offer Canadians significant benefits for both home purchasing and retirement planning. Understanding the various types of RRSPs and their uses can help individuals make informed decisions that maximize their financial growth and tax advantages.