Natasha Shaw

The Government of Canada has a Home Buyers’ Plan (HBP) that allows you to withdraw up to $25,000 from your registered retirement savings plan (RRSP) tax-free if you use it to buy or build your first home.  Check out the Canada Revenue Agency’s Home Buyers’ Plan for more details.

The process for participating in this program is fairly simple:

1.      You must enter into a written agreement to buy or build a qualifying home and qualify for appropriate mortgage financing BEFORE applying to withdraw funds under the HBP program

2.      Complete Form T1036 ( HBP – Request to Withdraw Funds From an RRSP) for each eligible withdrawal and submit to your RRSP issuer

3.      You must receive all withdrawals in the same calendar year

4.      You must arrange to buy or build the qualifying home before October 1 of the year after the year of the withdrawal.

You are given a maximum of 15 years to repay all your withdrawals and you will be required to repay at least 1/15 of the total amount every year until your HBP balance is zero. If you do not repay the amount due each year, it will have to be included in your income for that year.

To learn more about this program, have a look at the CRA‘s Guide to the Home Buyers Plan or contact to one of our Licensed Mortgage Professionals.