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First-Time Buyers

RRSP Home Buyers’ Plan

What is the HBP?

The Home Buyers’ Plan (“HBP”) is a program offered by the Canadian government that allows qualified first-time home buyers to withdraw up to $20,000.00 from their Registered Retirement Savings Plans (“RRSPs”) to buy or build a qualifying home. Some of the major benefits and features of the HBP are:

Major Benefits and Features of HBP:

  1. $20,000.00 Limit. There is a maximum of $20,000.00 of withdrawals from each buyer’s RRSP.  If you are buying a qualified home with your spouse, common law partner, or other individual, you can each withdraw a maximum of $20,000.00. 
  2. No Tax on Withdrawals.  You do not have to include eligible withdrawals from your RRSP in your income.
  3. New and Resale Homes.  The HBP applies for new and resale homes.
  4. Use of Funds.  Funds can be used for your downpayment, land transfer tax, improvements to the home, furniture, appliances, or legal fees and disbursements for the home purchase.
  5. Repayment.  You must repay all withdrawals from your RRSP within 15 years starting from 2 years after the year in which you made withdrawals.  Generally you have to deposit back to your RRSP 1/15 of the total each year, although prepayments are allowed any time without penalty.  However, if you miss an annual payment, that amount will be included in your taxable income for that year. 

Not everyone is eligible for the HBP.  Some of the major requirements of the HBP are as follows:

Conditions for HBP Participation:

  1. “First-Time” Buyers.  You and your spouse or common law partner must be first-time home buyers.  Alternatively, you and your spouse or common law partner must not have owned a home and occupied it as your principal place of residence in the five years prior to participating in the HBP.
  2. Agreement of Purchase and Sale.  You must have signed an agreement to purchase or build a qualifying home in Canada.
  3. Principal Residence.  You must use the home as your principal place of residence in Canada, and you must be a resident of Canada.
  4. RRSP Restriction.  HBP funds must have been in your RRSP account for at least 90 days before they can be used under the plan. 

More Information

Other restrictions and conditions apply.  For more information, you can contact your local bank branch or Canada Customs and Revenue Agency (formerly Revenue Canada).  The Canadian government also has a detailed online booklet about the HBP that you can access by clicking here.

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