For many Albertans rebuilding their lives after a separation, owning a home again is one of the most meaningful steps toward a fresh start. But divorce brings unique financial and legal questions – especially if you shared property with your former spouse. Thankfully, updates to Canada’s Home Buyers Program for after divorce make it easier for separated or divorced individuals to withdraw RRSP funds, purchase a new home, or even buy out a former partner’s share of the matrimonial home. Below is a clear, updated guide to how the program works following a separation, and how Alberta’s family property laws tie into the process.
Understanding the Home Buyers’ Plan (HBP) | What You Need to Know
The Home Buyers’ Plan (HBP) allows Canadians to withdraw an amount up to $35,000 from their RRSP tax-free to buy or build an HBP-qualifying home. These funds must be repaid over 15 years, functioning like an interest-free loan to yourself. Traditionally, HBP participants had to qualify as “first-time home buyers.” But for those navigating life after separation, recent changes now recognize the realities of shared property and divorce.
Eligibility After Separation | What Changed?
In the past, you could not use the program if you had lived in a home owned by your spouse within the previous four years. This rule unintentionally excluded recently separated individuals, even though they no longer had access to the home. To fix this, the federal government introduced special rules for people using the Home Buyers Program after divorce. You may now qualify as a first-time home buyer even if you lived in a home owned by your former spouse, as long as you meet the criteria below.
Key Requirements for the Home Buyers Program after divorce
In order to qualify and utilize the HBP after a separation, you must:
1. Have lived apart from your former spouse or common-law partner for at least 90 days (consecutively). This 90-day rule must be completed before your RRSP withdrawal.
2. Not be living in a home owned by a new spouse or partner. If you move in with a new partner who owns property, you will not qualify.
3. Have a formally written agreement to buy or build said HBP-qualifying home.
Be a Canadian resident at the time of withdrawal and until the home is bought or built. These rules allow separated homeowners to re-enter the market far sooner than the traditional four-year lookback period.
Using the HBP to Buy Out Your Former Spouse’s Share
Under the updated rules of the Home Buyers Program after divorce, you can now withdraw RRSP funds to purchase your former partner’s interest in the matrimonial home – a scenario previously prohibited. To qualify:
- Your purchase of the matrimonial home interest must occur no earlier than 30 days before your withdrawal, and
- No later than September 30 of the year following your withdrawal.
This provides a valuable option for those who wish to remain in the family home after separation.
Why These Changes Matter for Recently Divorced Canadians
Rebuilding after a separation often means:
- securing stable housing,
- establishing financial independence,
- and planning long-term stability – especially where children are involved.
These improvements to the Home Buyers Program after divorce acknowledge that individuals leaving a relationship should not be penalized for having lived in a home owned by their spouse. Today, separated individuals can:
- qualify for benefits sooner,
- buy out their spouse’s interest,
- and move forward toward independent homeownership with more flexibility.
How Alberta Property Division Connects to the HBP
In Alberta, family property includes assets gained or increased during the relationship – including the matrimonial home. When a relationship ends, property is typically divided equally unless otherwise agreed or ordered. Because property division and RRSP withdrawals often overlap, it is crucial to:
- understand your rights under Alberta’s Matrimonial Property Act,
- know the implications of buying out a spouse’s interest,
- and track the timing requirements of the HBP closely.
The Support You Need | Guidance Through Separation, Property Division & Homeownership
Divorce often brings complicated decisions – including what happens to the family home and how to prepare financially for the next chapter. Our family law team provides clear, strategic support with:
- Matrimonial and family property division
- Buying out a partner’s interest
- Rights and obligations under Alberta law
- Navigating certain timelines for the Home Buyers Program after divorce
- Understanding RRSP withdrawal implications
If you’re separating or navigating a divorce and are considering using the HBP after the separation, we can help you understand all of your options and protect your long-term financial interests. Connect with Mincher Koeman today, and we’ll help guide you on this journey.
