The Home Buyer’s Plan (HBP) is a great program designed to help Canadians become homeowners. The program was introduced by the Federal Government in 1992 to assist first-time home buyers in purchasing or building their first home. The plan allows the first-time home buyer and their spouse to each withdraw up to $35,000 from their RRSP savings for a down payment on a home, without having to pay tax on the withdrawal!
When withdrawing money from an RRSP under this plan, keep in mind the money has to be in the RRSP for a minimum of 90 days.
In order to qualify for the HBP, an individual must be:
- A Canadian resident
- A first-time home buyer
- Have a written agreement to buy or build a qualifying home
- Have gone without owning a home in the year of the acquisition or in any of the four preceding calendar years (details outlined in Canada Revenue Agency (CRA) guidelines)
The HBP has helped thousands of Canadians achieve the dream of homeownership. It grants them the ability to withdraw from their RRSP in a tax-free manner. The program is also advantageous because it allows buyers to pay themselves back over a 15-year period with interest-free instalments, making it a manageable option.
If you want to find out if the Home Buyers’ Plan will work for you, contact me and I would be happy to assist you.