Home Buyers' Plan (HBP)

HOME BUYERS' PLAN (HBP)

The Home Buyers' Plan (HBP) allows Canadians to withdraw up to $25,000 from their personal or spousal RSP to help buy or build a "qualifying" home. More specifically, the customer (HBP participant) can only withdraw funds from an RSP under which he or she is the annuitant. This withdrawal can be a single amount or a series of withdrawals throughout the same year.

Note: The 2009 Federal Budget introduced a change to increase the HBP withdrawal limit from $20,000 to $25,000 for withdrawals made on or after January 28, 2009.

 

Conditions For Participating Under The Home Buyers' Plan:

 

The individual must be:

  • Be a "first-time home buyer". To be considered as such, neither the individual or the individual's spouse/common-law partner can be an owner of a home in which they lived as a principal place of residence at any time in the period beginning on January 1 of the fourth calendar year preceding the year of withdrawal, and ending on the 31st day before the withdrawal of funds from the RSP. For example, to participate in the HBP in 2008 and be considered a first-time home buyer, the individual or spouse/common-law partner cannot have owned and occupied a home as the principal place of residence at any time during the period beginning January 1, 2004 and ending 31 days before the withdrawal in 2008.
  • Have entered into a written agreement to buy or build a qualifying home.
  • Intend to occupy the qualifying home as the principal place of residence no later than one year after buying or building the home. The home must be bought or built by October 1 in the calendar year following the year of withdrawal. An extension of 1 year or more may by available in some circumstances.
  • The individual has to be a resident of Canada when s/he receives funds from an RSP under the HBP and up to the time a qualifying home is bought or built.

All withdrawals must be made in the same year, however, if a withdrawal was made in one year and another in January of the following year, the withdrawal made in January is considered to have been made in the year the first withdrawal was made. Any withdrawals made after January will not be an eligible withdrawal under the HBP and will have to be included as income.

 

RSP Contribution Made Within 89 Days Of The HBP Withdrawal


RSP contributions must be made more than 89 days in advance of the HBP withdrawal. Contributions that have not been in the RSP plan for longer than 89 days do not qualify under the Home Buyers' Plan.

The same rules apply if the RSP contribution was made to a spousal RSP Plan.

 

Qualifying Home Conditions

Located in Canada

Existing or newly built or under construction

Neither the individual nor the spouse (common-law partner) can own the qualifying home more than 30 days before the withdrawal

The HBP Participant intends to occupy as a principal place of residence no later than 1 year after acquisition or building the home.

They include: single-family homes, semi-detached homes, townhouses, condominium units, mobile homes, apartment in a duplexes, triplexes, fourplexes or apartment buildings, a share in a co-operative housing corporation, entitling the holder to possess 1 of the above dwellings.

For More Information


Refer to the Canada Revenue Agency site or click on the following URL link:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

 

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John Siarkas

John Siarkas

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CENTURY 21 Heritage Group Ltd., Brokerage*
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