The Home Buyer's Plan
The Home Buyer's Plan (HBP) is a program established by the federal government that allows you and/or your spouse to make withdrawals of as much as $20,000.00 each from your RRSP's to buy (or build) a first home. The withdrawal funds are not included as income for the year and are, therefore, not taxed as such. You are required, however, to replenish the funds withdrawn back into your RRSP over a period of time. If you have limited savings but eligible RRSP's and are anxious to get into your first home, the HBP may be the solution you've been looking for.
Quick Numbers: Important Facts!
Who is Eligible? You must be a first time home buyer; you must have a written agreement to buy (or build) a home; you must occupy the home no later than one year after buying (or building) it; you must withdraw no more than $20,000.00; you must receive all withdrawals in the same year; you must be a resident of Canada.
All withdrawals must be repaid within 15 years; You must restart repayment in second year following the year in which you made your withdrawal.
When repaying, make your contribution in the year the payment is due or in the first 60 days of the next year.
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