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Federal Budget 2024: What are the proposed changes to the Home Buyers’ Plan and how might they affect me?

By Diane Amato

Published April 19, 2024 • 4 Min Read

In an effort to make homeownership easier for first-time home buyers, the Canadian Government recently proposed changes to the Home Buyers’ Plan under the 2024 federal budget. Looking to buy your first home? Find out how these changes may impact you.


  • The Home Buyers’ Plan allows first-time homebuyers to make tax-free withdrawals from their RRSP to help finance the down payment on a home

  • The 2024 federal budget proposes to raise the limit of this withdrawal amount from $35,000 to $60,000

  • The budget also proposes to extend the repayment grace period from two to five years

What is the Home Buyers’ Plan?

The Home Buyers’ Plan (HBP) is a program that allows you to make tax-free withdrawals from your Registered Retirement Savings Plan (RRSP) savings to help finance the down payment on a home for yourself or for a specified disabled person. The withdrawal is not taxable as long as it is repaid within a 15-year period. To qualify, you must be considered a first-time home buyer – if you are purchasing for a disabled person, this condition does not have to be met.  

What is changing?

To address the shortage of housing options, high rent prices and consistently increasing home values across the country, the 2024 budget proposes changes aimed at making home ownership easier for first-time buyers. The changes are as follows:

  • Increased withdrawal limits: The budget proposes that Canadians could withdraw as much as $60,000 from their RRSP, up from the previous limit of $35,000. Couples purchasing a home together would be able to withdraw up to $120,000 from their RRSPs to purchase a new home.

  • Extended repayment grace period: Funds withdrawn under the HBP must be repaid to their RRSP over a 15-year period. At least 1/15 of your withdrawal must be repaid to your RRSP each year. Up to now, the repayment period began as of the second year after the first withdrawal was made. The budget proposes to temporarily defer the start of this repayment period by an additional three years. So, for anyone making their first withdrawal between January 1, 2022 and December 31, 2025, they would have five years before repayment must begin.

In addition to changes to the Home Buyers’ Plan, the budget proposes to allow 30-year mortgage amortizations for first-time home buyers purchasing newly built homes. This change, which would take effect August 1, 2024, would help more Canadians afford a monthly mortgage payment.

What does this mean for me?

If you’re looking to buy your first home, you know how challenging it can be to save for a down payment – an essential first step towards home ownership. The changes to the Home Buyers’ Plan consider that the size of a down payment – and the amount of time needed to save enough – is much larger today than when the program first started. Having the option to withdraw more from your RRSP – and take more time before beginning to repay the amount you borrowed – can ease the path to home ownership.

While this proposed measure will apply to withdrawals made after April 16, 2024, be sure to check with your financial institution whether the increase in the limit is in fact in place when you’re ready to make your withdrawal.

Other programs and incentives to help home buyers

If you’re a first-time home buyer in Canada, there are other plans in place that could help make purchasing your first home easier:

  • First Home Savings Account (FHSA): The FHSA is a registered plan that can help you save for your first home. First-time home buyers can make tax-deductible contributions of up to $8,000 per year, up to a lifetime maximum of $40,000.  

  • First-Time Home Buyer’s Tax Credit (HBTC): The HBTC allows first-time home buyers who acquire a home to claim a non-refundable tax credit of up to $1,500.

  • GST/HST New Housing Rebate: The GST/HST rebate is available for new home purchases and could reduce upfront costs to help make homeownership more affordable.

  • Some provinces and territories have their own programs to help home buyers. For example, there are grants, tax credits, rebates and incentives to help cover land transfer tax, down payments and other housing costs. 

An RBC Mortgage Specialist can help guide you through your entire home buying journey – from saving for your down payment to getting the keys to your new place. Plus, they can advise you on our current rates and offers.

Your First Step is to Connect with an RBC Mortgage Specialist

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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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