The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.
You must intend to occupy in the qualifying home as your principal place of residence within one year after buying or building it. If you buy or build a qualifying home for a related person with a disability, or help a related person with a disability buy or build a qualifying home, you must intend that that person occupies the qualifying home as his or her principal place of residence
You must be a first time homebuyer.
You are considered a first-time home buyer if, in the prior four year period, you did not occupy a home that you or your current spouse or common-law partner owned.
This home can be a resale or new from a builder.
At the time of the withdrawal of the RRSP monies you must NOT owe any funds to your RRSP’s
RRSP Funds must deposited into your account at least 90 days prior to the completion date.
The funds can be used to b appplied towards a downpayment, improvements to the home, legal fees, land transfer tax, furniture and applicances.
Maximum amount to be withdrawn is $25,000.00 per Buyer.
Generally, you have up to 15 years to repay to your RRSP(s) the amounts you withdrew from your RRSP(s) under the HBP. However, you can repay the full amount into your RRSP(s) at any time.
Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers’ Plan (HBP) statement of account, with your notice of assessment or notice of reassessment.
The statement will include:
- the amount you have repaid so far (including any additional payments and amounts you included on your income tax and benefit return because they were not repaid);
- your remaining HBP balance; and
- the amount you have to contribute to your RRSP(s), and designate as a repayment for the following year.
However if you miss a payment for any given year, you will not be allowed to pay it back and it will be included on your taxable income for that year.
For more infomration please visit the CRA website at: http://www.cra-arc.gc.ca/hbp/