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Home Buyer’s Plan

Important Information About the HBP

Available only to first time home buyers defined as those who have not owned a home and lived in it as a principal residence in any of the 5 preceding calendar years. Further:

  • Individuals can only participate in the Plan once.
  • Maximum withdrawal amount is $35,000.
  • If your spouse is also eligible you can each withdraw $35,000 for a total of $70,000.
  • The money you take out of your RRSP must have been deposited at least 90 days prior to the withdrawal.

Eligible Homes For This Plan:

  • Any existing or new home located in Canada.
  • Can be detached, semi-detached, townhouse, condominium, mobile home, or co-op.
  • Must be occupied as principal residence within one year after buying or building the home.

Benefit:

  • Allows you to purchase a home with money “borrowed” from your RRSP.
  • There is no withholding tax on the withdrawn amount and no tax liability when you repay the money to your RRSP over a period of not more than 15 years.
  • The repayment begins the second calendar year following the year in which the withdrawal is made.

Example:

  • June 2020 withdraw $15,000 from RRSP to purchase a home.
  • No repayment to RRSP in 2021.
  • 2022 repayment is $1,000 ($15,000-15 years).
  • Payment is due by December 31, 2022.
  • If you repay only $700 in 2022 you must report the $300 shortfall as income for 2020.
  • Year 2023 payment will be another $1,000.

*It is always advisable to check the above with your Lender. You may also review the CMHC Home Buyers Guide and other pertinent information found on www.cmhc.ca or ask us to email you a copy.

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