Government Programs for Home Buyers
RRSP Home Buyers' Plan
The Home Buyers' Plan (HBP) is a
program under which you can, generally, withdraw
up to $25,000 from your
registered retirement savings plan
(RRSPs) to buy or build a qualifying home.
Withdrawals that meet all applicable HBP conditions
do not have to be included in your
income, and your RRSP issuer will not withhold
tax on these amounts. However, before you can
withdraw funds you must have entered into a
written agreement to buy or build a qualifying
home which you must occupy no later than one
year after buying or building the home.
If you buy the qualifying home together with
your spouse or other individuals, each of you
can withdraw up to $25,000. You cannot withdraw
an amount from your RRSP under the HBP
if you or your spouse owned the home more
than 30 days before the date of your withdrawal.
- Up to $25,000 per person could be
withdrawn tax-free from RRSPs to buy or
build a principal residence. Couples —
including common-law — will be able to
withdraw up to $50,000.
- You have to meet the first-time buyer's condition.
You are not considered a
first-time home buyer if you or your spouse
owned a home that you
occupied as your principal place of residence
in the past 5 years. To determine past
5 years, the 4 years
preceding the year you make your
withdrawal plus the period in the year you
make your withdrawal ending 31 days
before your withdrawal is the rule adopted.
- Home buyers withdrawing funds do
not have to pay income tax on the amount
withdrawn, as long as the funds are repaid
into an RRSP in the future.
- The 15-year repayment period will begin in
the second calendar year following the calendar
year in which the withdrawal is made. In
addition, a qualifying home must generally
be acquired before October 1 of the calendar
year following the year of withdrawal. For
example, those making withdrawals under
the plan in 2009 will have until October 1,
2010 to acquire a qualifying home and their
first annual repayment will
be due by the end of 2011 or
the first two months of 2012.
- A special rule denies a tax
deduction for contributions
to an RRSP that are withdrawn
within 90 days of the
RRSP deposit being made.
Consequently, to get the
normal tax break for a contribution
and to use those
funds under the plan, the
money must be in your
RRSP for at least 90 days
before a withdrawal is made.
Existing homeowners can use the HBP to purchase
a more accessible home or a home for a
disabled dependent relative where the individual
withdrawing the funds:
- qualifies for the disability tax credit (DTC)
and is buying a home that is more accessible
for the individual or is better suited for the care of the individual;
- is related to a disabled individual who qualifies
for the DTC and is
buying a home for the benefit of the disabled
individual that is more accessible for,
or better suited for, the care of the disabled
- is related to a disabled individual who qualifies for the DTC and is withdrawing an
amount for the disabled individual to buy a
home that is more accessible for, or better
suited for, the care of the disabled individual.
If you buy the
your spouse or
each of you can
withdraw up to
A special rule
denies a tax
an RRSP that are
90 days of the