Registered Retirement Savings Plans (RRSPs) are designed to help Canadians save for retirement. Normally, when you take money out of your RRSP, that withdrawal is taxable income in the year you take it out.

But the Government of Canada allows two special programs where you can take money out of your RRSP without paying tax right away.

These programs are the Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP).

Both allow tax‑free withdrawals if you follow the rules and repay the money over time. The Canada Revenue Agency (CRA) administers these rules.

What is the Home Buyers’ Plan (HBP)?

The Home Buyers’ Plan (HBP) lets eligible Canadians withdraw money from their RRSP to buy or build a qualifying home without immediate tax.

Under the HBP, you can take up to $35,000 from your RRSP if you are a first‑time home buyer. The money must be used to buy or build a home for yourself or a related person with a disability.

You must enter into a written agreement to buy or build the home. To participate, you must meet certain conditions set by the CRA.

Who qualifies for the Home Buyers’ Plan?

To be eligible for the HBP, you must:

• Be a Canadian resident when you withdraw the funds.
• Be a first‑time home buyer or meet an exception if you or your spouse have lived in a home owned by you in the past four years.
• Have a written agreement to buy or build a qualifying home.
• Intend to live in the home as your principal place of residence within one year of buying or building it.

If these conditions are met, you can apply to withdraw money from your RRSP under the HBP without immediate tax.

How much can I withdraw under the Home Buyers’ Plan?

Under the HBP, you can withdraw up to $35,000 from your RRSP without paying tax when you take it out.

If you and your spouse buy the home together, each of you may withdraw up to $35,000 from your own RRSPs for a total of $70,000.

To make the withdrawal, you must complete Form T1036, Home Buyers’ Plan (HBP) Request to Withdraw Funds from an RRSP. Your financial institution needs this form before releasing the funds.

What is the Lifelong Learning Plan (LLP)?

The Lifelong Learning Plan (LLP) allows you to withdraw money from your RRSP to pay for full‑time education or training for you or your spouse or common‑law partner.

Under the LLP, you can withdraw up to $10,000 per year, to a maximum of $20,000 total, without immediate tax. The education must be at a designated educational institution, and you must be enrolled in a qualifying program.

You must apply before you withdraw the money.

Who qualifies for the Lifelong Learning Plan?

To qualify for the LLP:

• You must be enrolled in a qualifying educational program at a designated institution.
• You must be a student or your spouse or common‑law partner must be a student.
• The courses must run full‑time for at least three consecutive months in the year.
• You must be enrolled in the course when you withdraw funds or within 60 days before the withdrawal.

If these criteria are met, you can take out tax‑free RRSP withdrawals for education costs under the LLP.

How do I repay money taken under HBP or LLP?

Withdrawals under both the HBP and the LLP must be repaid to your RRSP over time. If you do not make the required repayment for a year, the amount you were supposed to repay becomes taxable income for that year.

For the Home Buyers’ Plan:

• You must start repaying in the second year after the year you make the withdrawal.
• You have 15 years to repay the full amount.
• Each year you must repay at least 1/15 of the total amount you withdrew.
• Repayments are not tax‑deductible.

For the Lifelong Learning Plan:

• Repayments begin in the fifth year after your first withdrawal or the second year after you stop being a full‑time student, whichever comes first.
• You have up to 10 years to repay.
• Each year you must repay at least 1/10 of the total amount withdrawn.
• Repayments are not tax‑deductible.

The CRA provides a repayment schedule and tracks your amounts. You report repayments on your tax return.

What happens if I do not repay HBP or LLP amounts?

If you do not make the required minimum repayment in any year:

• The amount of the missed repayment is added to your taxable income for that year.
• You pay normal income tax on that amount at your marginal tax rate.

This rule ensures that the tax benefits of these programs are temporary unless repayments are made as scheduled.

The CRA provides guidance on how to report missed repayments.

How do I withdraw money from my RRSP under HBP or LLP?

To withdraw funds under these plans:

1. Confirm you meet all eligibility rules for HBP or LLP.
2. Complete the correct form:
   • Form T1036 for HBP withdrawals.
   • Form RC96 or equivalent for LLP withdrawals (available from the CRA).
3. Provide the form to your financial institution.
4. The institution issues the withdrawal.

Always keep copies of your forms and receipts. You will need them when you file your taxes or report repayments.

Are there limits to how often I can use HBP or LLP?

Yes. You may use the Home Buyers’ Plan more than once, but generally only if previous HBP amounts have been fully repaid and you qualify again as a first‑time home buyer.

For the Lifelong Learning Plan, you can participate again if you meet the eligibility requirements for a new education period and have not exceeded the $20,000 lifetime limit.

The CRA clarifies these limits for each program.

Can HBP or LLP withdrawals affect government benefits?

Withdrawals themselves do not count as taxable income in the year you take them, so they do not immediately affect income‑tested benefits.

But missing required repayments can increase your taxable income, which may affect benefits in future years.

Always check how repayment rules interact with benefit thresholds.