Understanding The RRSP Home Buyers’ Plan Program (HBP)
Did you know? You have access to the money in your RRSPs to take advantage of the Canada Customs and Revenue Agency’s (CRA) Home Buyer’s Plan.
Taking Advantage of the RRSP Home Buyers’ Plan
First-time homebuyers purchasing a home may withdraw up to $35,000, tax-free, from their RRSP. They can use it as a down payment or cover other purchase-related costs.
Spouses and partners are also able to do the same, for a combined total of $70,000. What makes this so great is that it is not taxable as long as you repay it within 15 years. One-fifteenth, a year of the amount that you withdrew from your RRSP, has to be repaid.
The HBP is an excellent opportunity to leverage your RRSP to purchase a home – it will help set you up for success down the road. The RRSP funds must remain in your account for a least 90 days to qualify for the program. Also required is a signed agreement to buy or build a home that qualifies for the program.
Below are the requirements needed to participate in the RRSP Home Buyers’ Plan:
- you are a first-time home buyer
- you or your relative with a disability must have an accept Agreement to Purchase and Sale
- you were a resident of Canada when you withdrew funds from your RRSP’s
- You must intend to occupy the qualifying home as your principal place of residence within one year after buying or building it. If you are purchasing or building a home for a relative with a disability, it must their principal place of residence.
- If you previously participated in the HBP, it must be repaid in full by January 1st of the year of the withdrawal.
Who Qualifies as a First-Time Home Buyer Under the RRSP Home Buyers’ Plan Program?
- Your current spouse or common-law partner must not have occupied a home they owned for four years.
- You have lived apart from your spouse or common-law partner for at least 90 days due to a breakup. Note: you will not be able to take advantage of the program if your principal place of resident is owned and occupied by a new spouse or common-law partner.
Interested in Learning More?
If you’re interested in learning more about the RRSP Home Buyers’ Plan and how you can make it work for your purchase, please feel free to reach out to us today.
We’ll help you determine if you apply, exactly how much money you may have access to, and what you can do with it to make the right purchase for you.