Guide to the T1036 Home Buyers' Plan Repayment Form

What Is the Home Buyers' Plan (HBP)?

Quick tip: download the official T1036 first, then fill it while following this guide: Download T1036 form (official CRA).

The Home Buyers' Plan (HBP) is a Canadian government program that allows first-time home buyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home, without paying tax on the withdrawal. If you're buying with a spouse or partner who also qualifies, each of you can withdraw up to $60,000, for a combined total of $120,000.

This is a powerful benefit for newcomers to Canada who are purchasing their first home. However, the HBP is not a gift — it's essentially a loan from your own RRSP to yourself. You must repay the amount you withdrew back into your RRSP over a period of 15 years. The T1036 form is central to tracking and managing these repayments.

What Is the T1036 Form?

The T1036, officially titled "Home Buyers' Plan (HBP) Request to Withdraw Funds from an RRSP," is actually the form you use when withdrawing funds from your RRSP under the HBP. However, understanding this form is also essential for understanding your repayment obligations, as the withdrawal amount establishes what you need to repay.

For the repayment side, you track your repayments through Schedule 7 of your annual income tax return (T1). Each year, you designate RRSP contributions as HBP repayments on Schedule 7. But the T1036 is where the journey begins, and understanding the full picture — from withdrawal to repayment — is crucial.

How the HBP Withdrawal Works

Eligibility

To use the HBP, you must meet these requirements:

• You must be a first-time home buyer — meaning you haven't owned a home that you occupied as your principal residence in the past four years
• You must have a written agreement to buy or build a qualifying home
• You must intend to occupy the home as your principal residence within one year of buying or building it
• You must be a Canadian resident at the time of withdrawal and when you acquire the home
• The funds must have been in your RRSP for at least 89 days before withdrawal

Newcomer note: As a permanent resident of Canada, you qualify for the HBP. Even if you owned property in your home country, you may still be considered a first-time home buyer in Canada if you haven't owned a home in Canada in the past four years. Consult the CRA guidelines or a tax professional to confirm your eligibility.

Making the Withdrawal Using Form T1036

To withdraw funds from your RRSP under the HBP:

1. Complete Form T1036 — fill in your personal information, the amount you want to withdraw, and the details of your home purchase
2. Submit the form to your RRSP issuer (bank or financial institution) — they will process the withdrawal without withholding tax
3. You can make multiple withdrawals from different RRSP accounts, but the total cannot exceed $60,000
4. All withdrawals must be made in the same calendar year or by January 31 of the following year

Understanding Your HBP Repayment Obligation

This is where many people, especially newcomers, need clear guidance. Here are the key rules:

Repayment Timeline

• You have 15 years to repay the full amount you withdrew
• Repayments start in the second year after the year of your withdrawal — for example, if you withdrew funds in 2026, your first repayment is due for the 2028 tax year
• Each year, you must repay at least 1/15th of the total amount you withdrew

For example, if you withdrew $60,000 under the HBP:

• Your minimum annual repayment is $60,000 ÷ 15 = $4,000 per year
• You need to make this repayment for 15 consecutive years
• You can always repay more than the minimum in any year

How to Make Repayments

HBP repayments are made by contributing to your RRSP and then designating those contributions as HBP repayments on Schedule 7 of your tax return. This is important — it's not a separate payment; it's an RRSP contribution that you choose to apply against your HBP balance rather than claiming as a tax deduction.

When you file your tax return each year:

1. You make RRSP contributions as usual (to any RRSP account in your name)
2. On Schedule 7, you specify how much of your RRSP contribution is an HBP repayment
3. The amount designated as HBP repayment cannot be claimed as a tax deduction — it simply reduces your outstanding HBP balance

What Happens If You Don't Repay?

If you don't make the required minimum repayment in a given year, the shortfall is added to your taxable income for that year. This means you'll pay income tax on the unpaid amount.

For example, if your minimum repayment is $4,000 and you only contribute $2,500 as an HBP repayment, the remaining $1,500 will be included in your income and taxed at your marginal rate. This effectively converts the HBP benefit into a taxable RRSP withdrawal for that amount.

Filling Out Schedule 7 for HBP Repayment

Each year during the repayment period, you'll complete the HBP section of Schedule 7 on your tax return:

Line 24600 — RRSP/PRPP Contributions

This shows your total RRSP contributions for the year.

HBP Section of Schedule 7

In this section, you'll find:

• Your HBP balance: The CRA tracks this and shows it on your Notice of Assessment
• Minimum required repayment: 1/15th of your original withdrawal (adjusted if you've made extra repayments in previous years)
• Amount you're designating as HBP repayment: You choose how much of your RRSP contributions to designate. It must be at least the minimum amount, or the shortfall becomes taxable income.
• Remaining HBP balance: Your balance after this year's repayment

Strategies for Managing HBP Repayments

Pay More Than the Minimum

If you can afford it, repaying more than the minimum each year reduces your overall balance faster. However, remember that amounts designated as HBP repayments cannot also be claimed as RRSP deductions. You need to balance HBP repayment against the tax benefit of RRSP deductions.

Don't Forget to Designate

A common mistake is contributing to your RRSP but forgetting to designate the contribution as an HBP repayment on Schedule 7. If you don't designate, the CRA will treat it as a regular RRSP contribution (which you can deduct), but your HBP repayment will be considered missed, and the minimum amount will be added to your taxable income.

Track Your Balance

Your annual Notice of Assessment from the CRA shows your remaining HBP balance and the minimum repayment required for the following year. Review this each year when you receive it.

Use CRA My Account

Log into CRA My Account at canada.ca/my-cra-account to check your HBP balance, repayment history, and upcoming minimum repayment amounts at any time.

Special Situations

Selling Your Home

If you sell the home you purchased with HBP funds, you still need to continue your repayments. Selling the home does not cancel or change your repayment obligation.

Leaving Canada

If you become a non-resident of Canada, special rules apply. Generally, the entire remaining HBP balance may become payable (included in your income) in the year you become a non-resident. Consult a tax professional before making any decisions about leaving Canada if you have an outstanding HBP balance.

Separation or Divorce

Each spouse is responsible for repaying their own HBP withdrawal, regardless of relationship changes.

Tips for Newcomers

• Build RRSP room before using the HBP: Since RRSP contributions depend on earned income, you'll need to work and file taxes in Canada before you have significant RRSP room.
• Consider the First Home Savings Account (FHSA): As of 2023, Canada introduced the FHSA, a new account specifically designed for first-time home buyers. You may be able to use both the FHSA and HBP together — consult a financial advisor.
• Set up automatic contributions: To ensure you don't miss HBP repayments, set up automatic monthly RRSP contributions equal to at least 1/12th of your annual required repayment.
• Seek financial advice: The interaction between HBP repayments, RRSP deductions, and overall tax planning can be complex. A financial advisor or tax professional experienced with newcomer situations can help you optimize your approach.

Additional Resources

• CRA Home Buyers' Plan: canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
• Form T1036: canada.ca/en/revenue-agency/services/forms-publications/forms/t1036.html
• Schedule 7: Included with your T1 income tax return
• CRA My Account: canada.ca/my-cra-account
• First Home Savings Account (FHSA): canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account.html

The Home Buyers' Plan is a wonderful tool for newcomers purchasing their first home in Canada. By understanding the withdrawal process and, more importantly, the repayment obligations, you can take full advantage of this program without any surprises. Plan ahead, stay on top of your annual repayments, and enjoy the pride of homeownership in Canada. WelcomeAide is here to support you on your journey.

Download This Form

Before you submit anything, download the latest official file here: Download T1036 form (official CRA). Always use the latest version.

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• Download T1036 form (official CRA)
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