The Home Buyers Plan repayment grace period has changed significantly for Canadians who used their RRSP to buy a first home — and the rules are more generous than many realize heading into 2026. If you made an HBP withdrawal between 2022 and 2025, you already qualify for the 5-year deferral announced in the 2024 federal budget. But here’s the news many don’t know: the 2026 Spring Economic Statement extended the same 5-year grace period to withdrawals made between January 1, 2026 and December 31, 2028. In this guide, you’ll learn exactly when your repayments begin under the current rules, how the grace period affects your taxes, and smart strategies to prepare without financial stress.
What Is the Home Buyers Plan Repayment Grace Period and Why Does It Matter?
The Home Buyers Plan (HBP) allows first-time homebuyers to withdraw up to $60,000 from their RRSP tax-free for a qualifying home purchase. The catch? You need to repay that amount back to your RRSP over time — or face tax consequences. Under the original rules, repayments started in the second year following your withdrawal, giving you very little breathing room after the enormous expense of buying a home.
The Old Rules vs. the New 5-Year Grace Period
Before the 2024 federal budget changes, if you withdrew $35,000 from your RRSP under the HBP in 2022, your first repayment would have been due for the 2024 tax year. That meant scrambling to find extra cash just two years after draining your savings for a down payment, closing costs, furniture, and all those unexpected homeowner expenses.
The updated HBP rules introduced a 5-year repayment grace period — giving recent homebuyers substantially more time. As confirmed by Canada.ca, temporary repayment relief defers the start of the 15-year repayment period by an additional three years for participants making a first withdrawal between January 1, 2022, and December 31, 2025. The 15-year repayment period would start the fifth year following the year of first withdrawal.
2026 Update: The 2026 Spring Economic Statement extended this temporary relief further — participants making a first HBP withdrawal between January 1, 2026 and December 31, 2028 also qualify for the 5-year grace period (applicable to completion dates occurring before 2030). If you’re a first-time buyer making an HBP withdrawal in 2026, 2027, or 2028, you benefit from the same extended timeline.
Who Qualifies for the Extended Repayment Timeline?
The extended grace period currently applies to withdrawals made during the 2022–2028 window:
- 2022–2025 withdrawals: Extended by the 2024 federal budget ✅
- 2026–2028 withdrawals: Extended by the 2026 Spring Economic Statement ✅
- Pre-2022 withdrawals: On the original repayment schedule (no change)
- 2029+ withdrawals: Reverts to 2-year grace period unless further extended
The deferral is automatic — you don’t need to apply or notify the CRA. Your Notice of Assessment will reflect your updated repayment start date.
How Does the HBP Repayment Deferral Canada Timeline Actually Work?
Understanding exactly when your repayments begin requires looking at your specific withdrawal year. The CRA calculates your repayment schedule based on when you made the withdrawal, not when you purchased your home.
Calculating Your Personal Repayment Start Date
Here’s how it works using the Canada.ca confirmed example: if Paul withdrew $30,000 in 2023, his minimum required repayment of $2,000/year ($30,000 ÷ 15) starts in 2028 — not 2025 as it would have under the old rules. He makes repayments of $2,000 for 2028, 2029, and 2030, then recalculates based on any extra payments made.
For the $60,000 maximum withdrawal: $60,000 ÷ 15 years = $4,000 annual minimum repayment once the grace period ends.
The 15-year repayment period itself hasn’t changed — only the start date has shifted. This means you still repay the full amount over 15 years, but you’re starting that clock later.
Comparison: HBP Repayment Timelines by Withdrawal Year
| HBP Withdrawal Year | First Repayment (Old 2-Year Rules) | First Repayment (New 5-Year Grace Period) | Years of Extra Breathing Room |
|---|---|---|---|
| 2022 | 2024 tax year | 2027 tax year | 3 additional years |
| 2023 | 2025 tax year | 2028 tax year | 3 additional years |
| 2024 | 2026 tax year | 2029 tax year | 3 additional years |
| 2025 | 2027 tax year | 2030 tax year | 3 additional years |
| 2026 (NEW extension) | 2028 tax year | 2031 tax year | 3 additional years |
| 2027 (NEW extension) | 2029 tax year | 2032 tax year | 3 additional years |
| 2028 (NEW extension) | 2030 tax year | 2033 tax year | 3 additional years |
💡 Important timing note: For 2022 withdrawals, your first $4,000 repayment (at $60,000 maximum) is due for the 2027 tax year — filed in early 2028. If you withdrew in 2022, that deadline is less than 18 months away as of July 2026. Start preparing now.
What Happens If You Withdrew in Multiple Years?
Some homebuyers made multiple HBP withdrawals across different calendar years (permitted until October 1 of the year following your home purchase, or within the same calendar year plus January of the following year). Your repayment schedule is typically based on your first qualifying withdrawal date. Each year’s withdrawal amount is tracked, but the repayment clock starts from your first withdrawal.
How to Maximize the Home Buyers Plan Repayment Grace Period
Having extra time before repayments begin isn’t just about delaying the inevitable — it’s an opportunity to strengthen your overall financial position.
Step 1: Build Your Emergency Fund First
New homeowners face unexpected expenses constantly. Before focusing on RRSP repayments, build a solid emergency fund of 3–6 months’ expenses in a high-interest savings account at EQ Bank or a similar online bank. This is your financial cushion before any planned RRSP repayment strategy begins.
Step 2: Create a Dedicated HBP Repayment Savings Plan
Even though repayments aren’t due yet, start setting aside money now. If you owe $60,000 over 15 years ($4,000 annually), that’s roughly $333/month. Open a separate savings account labeled “HBP Repayment” and automate transfers. When repayments begin, you’ll have a cushion — or the ability to make accelerated payments that reduce your future minimums.
💡 Pro Tip: Early voluntary HBP repayments are allowed and reduce your future required amounts. Under the new rules, any repayments made before your required start date will reduce your HBP balance and your future minimum annual repayments. There’s no penalty for paying early.
Step 3: Review Your Overall RRSP Strategy
For 2026, the RRSP contribution limit is $33,810 (or 18% of your 2025 earned income, whichever is lower). Your HBP repayments don’t count against this limit — they’re a separate designation. This means you can make both regular RRSP contributions AND your required HBP repayment in the same year. For example, if your $4,000 HBP repayment is due and you also have $5,000 in RRSP room, you can contribute $9,000 total — designating $4,000 on Schedule 7 as HBP repayment and deducting $5,000 as a regular RRSP contribution.
Step 4: Consider FHSA Contributions for Additional Benefits
If your partner hasn’t used the FHSA and may qualify as a first-time buyer for a future property, they can still contribute ($8,000/year, $40,000 lifetime). This could be relevant for couples planning to upgrade homes. For first-time buyers who haven’t yet closed on their purchase, combining FHSA ($40,000 maximum) with HBP ($60,000) gives access to up to $100,000 per person in tax-advantaged down payment funds.
Common Mistakes to Avoid With HBP Repayment Under the 2026 Rules
Mistake #1: Assuming the Repayment Is Optional
HBP repayment isn’t a suggestion — it’s a requirement. If you don’t make your minimum annual repayment once your grace period ends, the CRA adds that amount to your taxable income for the year. On a $4,000 missed repayment at a 30% marginal rate, that’s $1,200 in extra taxes. This isn’t forgiveness — it’s accelerated taxation of money you originally withdrew tax-free.
Mistake #2: Forgetting to Designate Your Repayment on Schedule 7
This detail catches many people off guard: simply contributing to your RRSP doesn’t automatically count as an HBP repayment. When you file your taxes, you must specifically designate which portion of your RRSP contribution is your HBP repayment using Schedule 7 of your T1 return. Forgetting this step means you’ll have unused RRSP contribution room but still owe the missed HBP payment as taxable income. The CRA does not automatically apply RRSP contributions to HBP balances.
Mistake #3: Not Tracking Your Balance
The CRA tracks your HBP balance and provides an annual statement on your Notice of Assessment showing how much you still owe, your minimum payment for the year, and your repayment deadline. You can also check your HBP balance anytime through your CRA My Account portal. Review this every year, especially as your grace period approaches its end.
Mistake #4: 2022 Withdrawers Waiting Until 2027 to Start Saving
If you withdrew in 2022, your first repayment is due for the 2027 tax year — filed in early 2028. That’s about 18 months away as of July 2026. If you haven’t started saving yet, begin setting aside your $333/month HBP repayment amount today so you’re not scrambling when the CRA notice arrives.
Mistake #5: Thinking the 2028 Deadline Is the End
The grace period ends different years for different people. Don’t confuse the last year to make a withdrawal and still qualify for the 5-year deferral (December 31, 2028 under the current extension) with your personal repayment start date (which is 5 years after your specific withdrawal year). These are completely separate dates.
Key Takeaways
- Withdrawals made from January 1, 2022 to December 31, 2025 have a 5-year grace period before repayments begin — this is 3 extra years compared to the original 2-year grace under the old rules.
- The 2026 Spring Economic Statement extended this 5-year grace period to withdrawals made January 1, 2026 through December 31, 2028 — if you’re buying a home now, you still benefit from the deferral.
- Your annual repayment = total HBP withdrawal ÷ 15 years. For the $60,000 maximum: $4,000 per year once repayments start.
- If you withdrew in 2022, your first repayment is due for the 2027 tax year — less than 18 months away. Start saving now.
- Missing a repayment means that amount gets added to your taxable income — potentially costing you $1,200–$2,000+ in extra taxes at typical marginal rates.
- You must designate your repayment on Schedule 7 when filing — RRSP contributions don’t automatically apply to HBP balances.
- HBP repayments don’t reduce your annual RRSP contribution room — you can make both regular RRSP contributions ($33,810 limit for 2026) and your HBP repayment in the same year.
Frequently Asked Questions
When do I need to start repaying my Home Buyers Plan withdrawal in 2026?
Your start date depends on when you withdrew. If you withdrew in 2022, your first repayment is due for the 2027 tax year (filed in early 2028). For 2023 withdrawals, repayments begin with the 2028 tax year. The CRA confirms your exact start date on your Notice of Assessment, and you can verify it through your CRA My Account portal anytime. Under the 2026 Spring Economic Statement extension, 2026 withdrawals don’t require first repayment until the 2031 tax year.
How does the 5-year HBP repayment grace period affect my taxes?
During the grace period, there are no tax implications from the HBP — your withdrawal remains tax-free as long as you eventually repay it. Once repayments begin, any missed minimum payment gets added to your taxable income for that year. For example, if you miss a $4,000 repayment and you’re in a 30% marginal tax bracket, you’ll owe an extra $1,200 in taxes for that year. The amount taxed is the shortfall — not your entire HBP balance.
Can I still contribute to my RRSP during the HBP repayment deferral period?
Yes, absolutely. Regular RRSP contributions and HBP repayments are completely separate streams. During the deferral period, you can contribute up to your available RRSP room (18% of earned income, maximum $33,810 for 2026 based on 2025 earned income). Once repayments begin, your HBP repayment doesn’t reduce your RRSP contribution room — you can make both your required HBP repayment AND additional deductible RRSP contributions in the same year.
Does the 5-year grace period apply if I’m making my first HBP withdrawal in 2026?
Yes. The 2026 Spring Economic Statement extended the 5-year repayment grace period to first HBP withdrawals made between January 1, 2026 and December 31, 2028 (for home completions before 2030). A 2026 withdrawal means your first required repayment is for the 2031 tax year — the same 5-year deferral that applied to 2022–2025 withdrawals. If you’re buying a home right now and planning an HBP withdrawal, you benefit from the extended timeline.
The Home Buyers Plan repayment grace period — now extended through 2028 withdrawals under the 2026 Spring Economic Statement — gives recent and current homebuyers crucial time to stabilize financially after the enormous expense of purchasing a first home. Whether you withdrew $20,000 or the full $60,000, use this runway wisely: build your emergency fund, start saving now for your 2027–2031 first repayments (depending on your withdrawal year), and always designate your RRSP contributions correctly on Schedule 7. Ready to optimize the rest of your financial plan? Explore more Canadian personal finance strategies on Getwealthy to make every dollar work harder for your future.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified financial advisor or tax professional for personalized advice.