Home Buyers' Plan repayment rules: the 15-year clock, explained

Down payment · 8 min read

Withdrawing under the Home Buyers' Plan (HBP) is the easy part to understand: up to $60,000 per person comes out of an RRSP tax-free to buy or build a qualifying home — up to $120,000 for a couple where both partners qualify. Repayment is where buyers get tripped up, because the rules that matter most are not the headline ones. The repayment period is 15 years, yes — but when the clock starts depends on the year of the first withdrawal, the amount due each year is recalculated rather than fixed forever, a contribution only counts if it is designated on the tax return, and the cost of falling short is precise: the shortfall is added to taxable income. This guide walks through repayment the way the Canada Revenue Agency (CRA) administers it, with the numbers worked out.

The clock: when repayments actually start

The general rule is that repayments start in the second year after the year of the first withdrawal, and the full amount is repaid over 15 years. A temporary relief measure changes the start for a defined group: participants whose first withdrawal fell between January 1, 2022 and December 31, 2025 get the start deferred by three additional years, so their 15-year repayment period begins in the fifth year after the withdrawal year. The CRA's own examples make the split concrete — a first withdrawal in 2020 meant a first repayment year of 2022, while a first withdrawal in 2022 means a first repayment year of 2027.

Two points in that table deserve emphasis. First, the relief changes only the start — the repayment period is still 15 years once it begins, so a deferred start means a later finish, not a shorter obligation. Second, repaying early is allowed and does not shorten the period: the CRA states that starting early leaves the repayment period the same, with early amounts reducing what is due in the first required year, and any excess above that first year's requirement reducing the balance and the minimums in later years. There is no penalty for getting ahead — but there is also no reward in the form of a shorter schedule, beyond smaller required payments later.

The minimum: 1/15 of the balance, recalculated every year

The minimum annual repayment in the first repayment year is one-fifteenth of the total amount withdrawn. After that first year, the formula the CRA uses is the remaining HBP balance divided by the number of years left in the repayment period — which is why repaying extra lowers every later minimum, rather than just finishing the schedule early at the same payment. Worked at three withdrawal sizes, using only the sourced 1/15 rule:

The CRA's published examples confirm the mechanics at both ends of the relief split. A $30,000 withdrawal in 2023 produces a $2,000 minimum starting in 2028 under the relief timing; a $16,500 withdrawal in 2019 produced a $1,100 minimum starting in 2021 under the general timing. And the recalculation is visible in the same examples: after several minimum payments and one larger $8,000 designated repayment, the following year's minimum falls — to $472.73 on the older example's remaining $5,200 balance over 11 remaining years, and to $1,454.55 on a $16,000 balance over 11 years in the relief example. The practical reading is that the 1/15 figure is a starting point, not a fixed payment for 15 years: every dollar repaid above the minimum re-prices all the minimums that follow.

How to make a repayment count: the Schedule 7 procedure

Here is the step most likely to go wrong, because it is invisible. Contributing to an RRSP does not by itself repay the HBP. The contribution counts only when it is designated as an HBP repayment on the tax return — and a designated repayment behaves differently from a normal RRSP contribution in two ways buyers must plan around: it cannot be claimed as a deduction, and it does not restore or use up RRSP contribution room — the CRA is explicit that repayments do not affect the RRSP deduction limit, and a repayment can be designated even if that limit is zero. One more boundary: HBP amounts cannot be repaid into an FHSA. The repayment has to go into an RRSP, a pooled registered pension plan (PRPP), or a specified pension plan (SPP) — though it does not have to be the same account the money was withdrawn from.

1. Find the amount due. Read the minimum required repayment for the year from the HBP statement that arrives with the Notice of Assessment (see the tracking section below).
2. Contribute in the window. Contribute at least that amount to an RRSP, PRPP or SPP in the year the repayment is due, or in the first 60 days of the following year.
3. Designate it. Complete Schedule 7, RRSP, PRPP and SPP Contributions and Transfers, and HBP and LLP Activities, and enter the repayment amount on line 24600, filed with the income tax and benefit return. Without this step, the contribution is treated as an ordinary contribution and the repayment is recorded as zero.
4. Do not deduct the designated amount. The same dollars cannot be both a repayment and a deduction. Any additional RRSP contributions beyond the designated repayment are a separate decision under the normal deduction rules.
5. Keep filing. A return must be filed every year until the HBP balance is fully repaid or fully included in income — the obligation to file does not pause in years when nothing was contributed.

What success looks like: after filing, the next Notice of Assessment shows the HBP balance reduced by exactly the amount designated, and the statement's minimum for the following year equals the new balance divided by the years remaining. If the balance did not move by the designated amount, the designation — not the contribution — is the first place to check.

What a shortfall costs: the line 12900 calculation

If the amount designated for a year is less than the minimum required, the difference is included as RRSP income on line 12900 of that year's return — and the amount included cannot exceed the minimum itself. The balance is then reduced by that included amount as well, so the money is not owed twice; it is simply taxed as though it had been withdrawn from the RRSP outright, which is the outcome the HBP withdrawal avoided. Totalled up, the cost of a missed year on the maximum withdrawal looks like this:

That worked example — $4,000 due, $1,000 repaid, $3,000 to income — is the standard illustration of the rule, and it shows why a shortfall is best understood as a tax cost, not a debt penalty: there is no fine and no interest charge described in the rules, but the $3,000 is taxed at the household's marginal rate in a year when no cash was set aside for the bill, and the tax-sheltered room that amount represented is gone. Missing one year does not cancel the plan, either — repayments are still required in each following year until the balance reaches zero, one way or the other. A household that treats a shortfall as a deliberate choice should make it deliberately: priced in advance as income, not discovered on the assessment.

Tracking the balance: Notice of Assessment and My Account

The CRA tracks the plan and reports it back. Each year, an HBP statement of account arrives with the notice of assessment or reassessment (in some cases on Form T1028), showing three things: the total designated as repayments so far, including amounts included in income; the remaining HBP balance; and the amount to contribute and designate for the following year. The same statement appears on the notice of assessment itself, and the balance can also be checked through a CRA online account. The arithmetic behind the statement is simple enough to verify independently: the balance is the total withdrawn, minus total repayments, minus cancellations, minus amounts already included in income. If the statement and a household's own records disagree, the designation history on past Schedule 7 filings is where the difference will be — which is one more reason to keep each year's Schedule 7 with the return it was filed with.

FAQ

Are HBP repayments tax-deductible? No. An amount designated as an HBP repayment cannot be claimed as a deduction on the return. The deduction was effectively received when the original RRSP contributions were made; the repayment restores the sheltered balance, it does not create a second deduction.

Do repayments restore RRSP contribution room? No — and they do not consume it either. The CRA states that repayments do not affect the RRSP deduction limit, and a designation can be made even when that limit is zero. Repayment room and contribution room are separate ledgers.

Can repayments be made into an FHSA instead? No. The CRA states HBP withdrawals cannot be repaid into an FHSA. Repayments go to an RRSP, PRPP or SPP.

What if no repayment is made in a required year? The full minimum for that year is included as RRSP income on line 12900, the balance is reduced by that amount, and repayments remain required in the following years until the balance is zero.

Does repaying extra shorten the 15-year period? No. The period stays the same; extra repayments reduce the balance, which reduces the minimum required in each remaining year, because each later minimum is the balance divided by the years remaining.

General information only, not financial, mortgage, or tax advice. HBP rules, limits, and relief measures come from the Canada Revenue Agency and can change — confirm current repayment start dates, limits, and filing requirements with the CRA or a qualified tax professional before acting.