RRSP rules — contributions, deductions, and withdrawals
Registered retirement savings plans
Section 146 governs Registered Retirement Savings Plans (RRSPs) — the rules for contributions, deduction limits, investment rules, Home Buyers' Plan, and withdrawals.
Plain-language explanation
Section 146 is the statutory home of the RRSP. Key rules:
Contributions and deduction: You can contribute to your RRSP or a spousal RRSP up to your "RRSP deduction limit" (shown on your Notice of Assessment): 18% of prior year earned income, up to the annual dollar limit, plus unused room from prior years. The contribution is deducted under s.60(i).
The annual dollar limit: - 2024: $31,560 - 2025: $32,490 - 2026: $32,490 (same as 2025)
Investment rules: RRSPs can hold a wide range of "qualified investments" including: GICs, bonds, publicly-listed shares (Canadian and foreign), mutual funds, ETFs, and real estate investment trusts. Prohibited investments (personal-use property, shares of private corporations where the annuitant has significant influence) trigger a tax.
Home Buyers' Plan (HBP): First-time home buyers can withdraw up to $60,000 from their RRSP to buy a home. The withdrawal is not taxed, but must be repaid over 15 years starting 2 years after withdrawal. Failure to repay in a year adds that year's required repayment to income.
Conversion to RRIF: RRSPs must be converted to a Registered Retirement Income Fund (RRIF) or annuity by December 31 of the year you turn 71. RRIF withdrawals are fully taxable under s.56.
Example
Amara earns $85,000 in 2025. Her 2026 RRSP deduction limit is 18% × $85,000 = $15,300, plus any unused room carried forward. She contributes $15,300 by March 1, 2027 and deducts it on her 2026 T1. At a 43.41% combined marginal rate, she saves ~$6,642 in tax.
Amendment history
Significant changes to this provision. Older versions help you understand rules that applied in prior tax years.
RRSP dollar limit increased to $31,560 (indexed from $30,780 in 2023).
Before
$30,780 (2023)
After
$31,560 (2024)
RRSP dollar limit increased to $32,490.
Before
$31,560 (2024)
After
$32,490 (2025)
Home Buyers' Plan withdrawal limit increased from $35,000 to $60,000, effective for withdrawals made after April 16, 2024.
Before
$35,000 maximum HBP withdrawal
After
$60,000 maximum HBP withdrawal
Common questions
What is the RRSP contribution deadline for 2026? +
March 1, 2027. Contributions made in the first 60 days of 2027 can be applied to 2026 or 2027. There is no benefit to waiting — contribute as early as possible.
What is a spousal RRSP? +
You can contribute to an RRSP in your spouse's name (a "spousal RRSP"). You get the deduction, but the plan belongs to your spouse. On withdrawal (after 3 years from the last contribution), the income is taxed in the spouse's hands at their (usually lower) rate — good for income-splitting in retirement.
What happens to an RRSP when I turn 71? +
By December 31 of the year you turn 71, you must convert your RRSP to a RRIF (Registered Retirement Income Fund) or use the proceeds to buy an annuity. With a RRIF, you must withdraw a minimum amount each year (a percentage of the RRIF value based on age), which is taxable income.
Key terms
Related sections
Related calculators
Related guides
Source: Income Tax Act, RSC 1985, c. 1 (5th Supp.), section 146. — Read the official text on Justice Canada
These summaries are for educational purposes only and do not constitute legal or tax advice. Speak with a CPA for advice on your specific situation.