CRA Home Buyer’s Plan
The Home Buyer’s Plan (“HBP”) allows individuals after March 19, 2019 to withdraw money from their Registered Retirement Savings Plan (“RRSP”) to aid in buying (or building) a qualified home. This allowance applies to both homes you are purchasing for yourself, or for a relative with a disability. The current HBP limit stands at $35,000.00 with the ability to repay the amount over the course of 15 years, with repayment beginning the year after you withdrew the funds.
What does the $35,000 limit mean?
This means that you will not be taxed on withdrawn amounts up to $35,000.00 and if you are the eligible owner of multiple RRSP’s, each RRSP may be eligible. It is important to inquire as to whether your RRSP allows for withdrawals as some locked in or group RRSPs specifically do not allow for withdrawals.
Who is Eligible?
Below is a list of requirements from the Government of Canada’s Website on what determines eligibility for HBP:
– You must be considered a first-time home buyer
o You are considered a first-time home buyer if within the previous 4 years prior to your home purchase either you or your spouse/common-law partner did not occupy a home that you or they owned. It is also possible if you have a partner that only one of you qualifies.
– There must be a written agreement to either buy the home or build
– At either the time of purchase or withdrawal you must be a Canadian resident
– You or the family member with a disability that you are purchasing the home for must have the intention to make it your principal place of residence within the first year of ownership.
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